LIVESTOCK-CME lean hogs close limit-up on firming cash pork, China hopes
Julie Ingwersen, Reuters
July 9, 2019
CHICAGO, July 9 (Reuters) - Chicago Mercantile Exchange (CME) lean hog futures roared higher on Tuesday, with the most-active August and October contracts settling up by the daily 3-cents-per pound limit on a mix of technical buying, firmer cash pork values and optimism about U.S. trade talks with China, traders said.
CME’s most-active August lean hogs contract ended up the 3-cent limit at 79.075 cents per pound, rallying after dipping to 75.500 cents, its lowest level since June 27. Front-month July finished 1.300 cents higher to settle at 71.375 cents per pound.
The CME Group said daily limits in lean hog futures will expand to 4.5 cents per pound for Wednesday’s trade.
The market drew support in part after the U.S. Department of Agriculture’s (USDA) mid-morning pork report showed the average carcass value up $3.70 per cwt, with values surging for pork bellies.
The government’s afternoon pork report, however, showed the average carcass value up only $1.89 per cwt.
“The wholesale pork market coming alive certainly did not hurt,” said Doug Houghton, analyst with Brock Associates Inc.
Lean hog futures also drew support from news that White House economic adviser Larry Kudlow said China was expected to move forward “quickly” with agricultural purchases from the United States.
China has been struggling with outbreaks of African swine fever in its hog herd, the world’s largest, but so far the country’s purchases of U.S. pork have fallen short of traders’ hopes.
“There’s been some talk that (China’s) pork stocks will be running low and that they would be increasing purchases,” Houghton said.
Lean hog futures were also technically oversold...