June 10, 2010

US hog futures rise on possible increase in pork demand

Hog futures extended a rally from a three-month low on bets that export demand for US pork will increase as the world economy improves.

China's exports climbed 50% last month from a year earlier, according to reports. The dollar headed for the biggest decline in almost two weeks against a basket of six major currencies, increasing the appeal of US meat shipments.

Analysts said Chinese exports were strong, which suggests the global economy may be better than feared, adding that may lead to increases in domestic and overseas demand for meat.

Hog futures for July settlement climbed 0.275 cent, or 0.4%, to 78.475 cents a pound on the CME. Yesterday, the price gained 0.2% after touching 77.525 cents, the lowest level for a most-active contract since March 9.

Meanwhile, cattle futures for August delivery fell 0.35 cent, or 0.4%, to 87.475 cents a pound. Feeder-cattle futures for August settlement gained 0.375 cent, or 0.3%, to US$1.09225 a pound.

Cattle have dropped 10% since reaching a 19-month high on May 5 on concern that beef demand will wane.