CHICAGO, Oct 24 (Reuters) - Chicago Mercantile Exchange lean hog futures surged on Wednesday as concerns about the spread of African swine fever, particularly in China, fueled buying that took some contracts up by as much as their daily trading limits.
Additional support in actively traded December futures stemmed from the contract’s discount to cash hog prices, analysts and traders said.
“One, December hogs had too big a discount; and two, African swine fever continues to spread ... that was enough to tip us over,” said Don Roose, president of Iowa-based U.S. Commodities.
Concerns about the spread of the disease in China, the world’s largest hog and pork producer, have underpinned prices since it was first detected in early August.
China’s agriculture ministry said on Wednesday it would ban the feeding of kitchen waste to pigs after linking the practice to the majority of the country’s early cases.
Beijing has reported more than 40 cases of African swine fever and the disease, which does not affect humans, has spread across 12 provinces and municipalities.
CME December lean hog futures settled up the daily 3.000-cent trading limit at 57.525 cents per pound, narrowing their discount to the CME lean hog index, which was most recently quoted at 65.95 cents.
The contract climbed past its 20-, 30- and 50-day moving averages and closed just below its 200-day moving average.
The daily trading limit will expand to 4.5 cents following the limit-up close.
Live cattle futures also advanced, lifted by rising cash beef prices and expectations for firming cash cattle prices in the coming weeks.
CME December live cattle were up 1.200 cents at 118.350 cents per pound while February cattle gained 0.850 cent to 122.775 cents.
The U.S. Department of Agriculture quoted the choice boxed beef cutout value on Wednesday at $211.39 per cwt, up $1.11 from the prior day and up $6.83 from a week ago. Select cuts were up 96 cents at $197.82 per cwt, $6.63 above a week ago.
In a sign that cattle supplies available to packers may be tightening, the USDA last week reported a weekly slaughter of 625,000 head, down nearly 5 percent from 657,000 head slaughtered in a single week a month ago.
CME feeder cattle futures edged up in tandem with rising live cattle. November feeder cattle closed up 0.050 cent cents at 155.925 cents per pound. (Reporting by Karl Plume Editing by James Dalgleish)