By Julie Ingwersen
CHICAGO, June 16 (Reuters) – Chicago Mercantile Trade (CME) lean hog futures fell their each day 3-cent restrict on Wednesday, pressured by falling U.S. wholesale costs for pork merchandise and information of accelerating hog numbers in China, merchants stated.
China’s pig herd rose 23.5% in Could from a yr earlier, state media stated on Wednesday, citing the Ministry of Agriculture and Rural Affairs.
CME hog futures tumbled because the figures raised questions on export demand from China, which has been a key purchaser of U.S. pork since its herd, the world’s largest, was decimated by the lethal African swine fever virus. China’s herd plunged 40% in 2019, official knowledge confirmed. Extra not too long ago, as animal numbers rebound, reside hog costs in China have fallen.
“The information out of China, with the hog herd supposedly being rebuilt, spooked everyone,” stated Dan Norcini, an unbiased livestock dealer. Commodity funds maintain a internet lengthy place in CME lean hog futures, he famous, leaving the market susceptible to bouts of lengthy liquidation.
On the CME, the entrance 5 lean hog futures contracts fell the each day 3-cent restrict, with most-active July LHN1 settling down Three cents at 115.500 cents per pound and August LHQ1 at 111.700 cents.
The CME stated each day limits would increase to 4.5 cents for Thursday’s session.
Merchants additionally famous a steep drop in U.S. costs for pork bellies, that are used to make bacon. The U.S. Division of Agriculture on Tuesday afternoon reported wholesale stomach costs at $148.98 per hundredweight, a plunge of $48.35 from the day earlier than.
“The sharply decrease stomach cut-out yesterday added to the worry that demand is likely to be slowing down,” Norcini stated.
In distinction to the hog market, CME cattle futures closed greater on Wednesday, with reside cattle futures notching life-of-contract highs on a strengthening money cattle market, merchants stated.
CME August reside cattle futures LCQ1 settled up 1.025 cents at 124.925 cents per pound after reaching a contract excessive at 125.775 cents. August feeder cattle futures FCQ1 ended up 0.875 cent at 157.700 cents per pound.
Market-ready cattle traded in Kansas and Texas this week at $121 to $122 per hundredweight, merchants stated, up from trades of $119 to $120 final week.
(Reporting by Julie Ingwersen; Enhancing by Lisa Shumaker)
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