CHICAGO, Nov 29 (Reuters) – U.S. lean hog futures ended higher on Friday in a turnaround from a decline earlier in the session to their lowest price since early September.
Prices bounced back as pork producers are hoping that China will ramp up buying from the United States as it grapples with a fatal pig disease, African swine fever. An outbreak of the disease has decimated China’s hog herd since August 2018 and pushed pork prices to record highs.
The U.S. Department of Agriculture said that from Nov. 15 to 21, China bought 5,366 tonnes of U.S. pork for 2019 and 17,742 tonnes for 2020. Weekly shipments were the highest since February at 15,078 tonnes, according to USDA data.
U.S. farmers want China to buy more pork as America’s hog supplies are at a record high and meat packers are slaughtering more pigs than last year. The large supplies have recently pressured hog futures.
“You still have very much that optimism of China purchasing our pork,” said Jason Roose, analyst for broker U.S. Commodities in Iowa.
Benchmark February lean hogs closed up 1.025 cent at 68.175 and touched their highest price since Nov. 20 at the Chicago Mercantile Exchange.
Estimated pork cutout values also were firmer for carcasses and other pig parts, according to USDA data.
“If the cutout is strong, it shows our potential demand is keeping up with supplies,” Roose said.
CME cattle futures closed lower in a pullback from recent gains.
February live cattle ended down 0.500 cents at 126.200 cents per pound after setting a new contract high of 127.150. Front-month December hogs ended 0.225 cents lower at 121.200 cents.
CME January feeder cattle futures fell 1.050 cents to 142.275 cents per pound. (Reporting by Tom Polansek in Chicago Editing by Marguerita Choy)