November 16, 2018 / 11:17 PM / a month ago

LIVESTOCK-Lean hogs surge daily limit on African swine fever fears

    By Karl Plume
    CHICAGO, Nov 16 (Reuters) - Chicago Mercantile Exchange lean
hog futures         surged on Friday and the three most active
contracts closed up their daily trading limit on rising concerns
about the spread of African swine fever in China, traders said.
    Technical buying accelerated gains, lifting several
deferred-month contracts to life-of-contract highs.
    "African swine fever fears are in the market again," said
Doug Houghton, analyst with Brock Associates Inc. "China found
an outbreak in Sichuan, which is their largest pork producing
province, and also they found it in a wild boar. It just looks
like it's getting worse."
    The virus has been confirmed in than 60 locations in 18
provinces over the past three months despite government efforts
to curb its spread.             
    Hogs were also propelled higher by hopes for a thaw in tense
trade relations between the United States and China, the world's
top pork consumer, after U.S. President Donald Trump said he may
not impose more tariffs on Chinese goods.             
    Beijing slapped tariffs on U.S. pork in retaliation for U.S.
tariffs on Chinese goods, effectively halting exports to China.
    CME December hogs         settled at 60.075 cents per pound
and February         closed at 66.750 cents, both up their daily
3.000-cent limit and above all major moving averages. April
futures also closed limit-up, and the June 2019 through October
2019 contracts all posted new highs.
    Trading limits will expand on Monday to 4.500 cents after
the limit-up close, the exchange said.
    Live cattle futures         ended mixed, with nearby
contracts lifted by spillover support from rallying hogs.
    News that officials in Japan, the top beef importer, are
discussing lifting restrictions on U.S. beef from cattle older
that 30 months remained supportive for cattle, traders said.
    Light cash cattle trade at U.S. Plains feedlot markets at
mostly $114 per cwt, steady with last week, also underpinned
nearby futures.
    CME December live cattle         ended 0.200 cent higher at
115.350 cents per pound, while February futures        , the
most active month, rose 0.625 cent to 119.725 cents.
    Traders are looking ahead to next week's U.S. Department of
Agriculture Cattle on Feed report, which is expected to show
Nov. 1 on-feed supplies at 104.4 percent of a year ago.
            
    Feeder cattle futures         ended lower in a profit-taking
dip after strong gains earlier this week.
    Actively traded January feeder cattle         ended 1.325
cents lower at 146.525 cents per pound, while March         fell
0.575 cent to 143.975 cents.

 (Reporting by Karl Plume in Chicago
Editing by Matthew Lewis)
  
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