CHICAGO, July 13 (Reuters) - U.S. hog futures rose on Monday on signs of improving demand for pork products and optimism about export demand from China as the Asian country struggles with renewed outbreaks of a hog disease, traders said.
Chicago Mercantile Exchange (CME) August lean hog futures settled up 1.400 cents at 51.275 cents per pound, after reaching 51.825 cents, the contract’s highest since June 25.
The U.S. pork cutout, an indication of wholesale prices, was up $3.40 at midmorning at $72.35 per cwt, according to the U.S. Department of Agriculture, a bullish signal for traders. However, the USDA updated the cutout later on Monday, after the CME close, to $67.52 per cwt, a net decline of $1.43 compared to Friday.
Still, prices for certain cuts such as hams and bellies have risen over the last week.
“Some of these big users probably have determined that ham prices have bottomed out,” said Dennis Smith, commodity broker for Archer Financial Services in Chicago.
Meanwhile, outbreaks of African swine fever are surging in parts of China, home to the world’s largest hog herd, following heavy rains. Those outbreaks could pose a setback for Beijing’s goal of replenishing pork supplies.
“We are hearing that the export market is getting stronger, and it’s being driven by China, and also Mexico coming in,” Smith said.
In cattle markets, CME feeder cattle futures rose in response to lower prices for corn, the primary U.S. feed grain. Cheaper corn prices can encourage feedlots to pay more for calves.
CME August feeder cattle rose 1.300 cents to 137.050 cents per pound, after reaching 137.850 cents, the contract’s highest since May 8.
However, benchmark August live cattle futures settled down 0.350 cent at 99.650 cents per pound on worries about a seasonal slide in beef demand and weak wholesale beef prices.
Meat packers continue to work through a backlog of cattle dating to April, when several slaughterhouses closed as workers became infected with the new coronavirus. (Reporting by Julie Ingwersen; Editing by Tom Brown)
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