LIVESTOCK-CME lean hogs climb on technical buying, firmer cash hogs
Julie Ingwersen / Reuters
July 10, 2019 / 6:09 PM
CHICAGO, July 10 (Reuters) - Chicago Mercantile Exchange (CME) lean hog futures neared a three-week high on Wednesday, buoyed by a mix of technical buying and ideas that a glut of U.S. hog supplies was showing signs of tightening, traders said.
Fears of an expansion in Asia of the African swine fever (ASF) outbreak in China added support.
CME’s most-active August lean hogs contract settled up 2.650 cents at 81.725 cents per pound after reaching 82.850, its highest since June 20.
October hogs ended up 2.250 cents at 73.250 cents, a day after dipping to 67.425 cents, the contract’s lowest since February.
Hog futures soared in March and April on expectations that China’s swine fever outbreak would prompt China to boost purchases of U.S. pork. But the market erased those gains in May and June, falling in response to ample U.S. hog supplies and lukewarm pork sales to China.
“From a technical analysis perspective, those hogs (futures) were grossly oversold. The hogs have completely retraced the gains they put on when the news came out that China’s ASF situation was deteriorating,” said Dan Norcini, an independent livestock trader.
“You saw the market snap back from a move that got pushed too far to the downside,” Norcini said.
Improving cash hog values lent support. Cash hog prices in the closely watched Iowa and southern Minnesota market rose $1.36 on Wednesday.
“We are much on the verge of working our way through those excessively large slaughter numbers. I think you’re seeing that in the fact that packers are beginning to put better money on the table for hogs,” Norcini said...