Lean hogs rally for second day; rising pork prices, solid exports supportive
via Canada.com - Aug 8, 2019
CHICAGO — Chicago Mercantile Exchange (CME) lean hog futures posted strong gains for a second consecutive session on Thursday, lifted by short-covering and technical buying following the market’s recent drop.
Rising pork prices and solid pork exports supported the market, largely diluting concerns over U.S. trade tensions with China, the world’s top hog and pork market.
China has suspended all U.S. agricultural product purchases after U.S. President Donald Trump labeled the country a currency manipulator and vowed to slap more tariffs on Chinese goods next month if there is no progress toward a trade deal.
China bought a small amount of U.S. pork last week ahead of the latest escalation of the trade war, according to U.S. government data issued on Thursday.
Although the suspension of U.S. agricultural product purchases may keep a lid on new sales, shipments of previous orders is expected to continue. China has yet to take delivery of nearly 103,500 tonnes of U.S. pork bought before trade tensions ramped up.
Some analysts and traders believe China will also return to the market in coming months as the country’s African swine fever outbreak has drastically cut production of pork, China’s favorite meat.
“Perhaps we’ve overdone the expectation that China will never buy U.S. pork again,” said Rich Nelson, chief strategist with Allendale Inc. “Most people would probably say that China will have to come back at some point and buy U.S. pork.”
U.S. pork prices remain strong, with the latest carcass cutout value at $88.69 per cwt, just 4 cents below a 3-1/2 month peak posted on Tuesday...