Deferred hog futures set contract highs for fourth day on China demand
By Tom Polansek
CHICAGO, April 18 (Reuters) - U.S. hog futures set new
contract highs in deferred months for a fourth consecutive day
on Thursday on expectations of increased demand from China,
before prices pulled back.
Deferred feeder cattle futures also set contract highs.
An outbreak of African swine fever in China fueled the
temporary advances in deferred hog contracts, as analysts expect
Chinese buyers will further ramp up pork imports to compensate
for pigs killed by the incurable hog disease.
The U.S. Department of Agriculture reported China bought
23,473 tonnes of U.S. pork in the week ended April 11,
accounting for 71 percent of total U.S. weekly export sales.
That was China's third biggest purchase since the USDA began
tracking sales in 2013.
African swine fever - deadly in pigs but harmless for humans
- has spread rapidly through China, which accounts for about
half of global pork output, since the first outbreak was
reported last August.
"The China pork story is still alive," said Rich Nelson,
chief strategist for U.S. broker Allendale.
Nearby futures contracts ended higher, in a turnaround from
recent setbacks. Most-active Chicago Mercantile Exchange June
lean hog futures rose 0.625 cent to 96.750 cents per
October hogs lost 0.225 cent to 94.350 cents per
pound after setting a contract high of 95.300. December hogs
set a contract high of 90.200 cents per pound before
closing flat at 89.725 cents per pound.
Gains in the hog market and firmer cash cattle prices helped
underpin cattle futures, analysts said.
The USDA, in a monthly report, said 11.964 million head of
cattle were being fed for the slaughter market as of April 1, up
2 percent from a year earlier. That was slightly above analysts'
expectations for an increase of 1.7 percent.
Cattle placements in feedlots during March were 2.014
million head, up 5 percent from a year earlier. That was above
analysts' estimates for an increase of 3.4 percent.
Data was slightly bearish, but firmer cash cattle prices
could underpin futures on Monday, Nelson said.
In Nebraska, for example, fed cattle traded about $128 to
$130 per cwt this week, up from about $127 last week, traders
CME June live cattle futures rose 0.300 cent to
122.675 cents per pound. August live cattle futures
neared a one-month high and closed up 0.200 cent at 119.750
cents per pound.
August feeders set a contract high of 161.400 cents
before ending up 0.225 cent at 160.675 cents.
(Reporting by Tom Polansek in Chicago
Editing by Susan Thomas and Tom Brown)
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