US hog futures gain amid speculation on rising exports

Hog futures rose to a five-week high on speculation that US pork exports will increase after China, the world's largest consumer, ended its currency peg to the dollar.

China's yuan jumped the most since 2005. The peg was adopted two years ago during the global financial crisis to protect exporters. China was the fourth-largest buyer of US pork last year. The Reuters/Jefferies CRB Index of 19 raw materials climbed to a five-week high today on bets that the global economy will expand.

Hog futures for August settlement climbed 1.7 cents, or 2.1%, to 84.35 cents a pound on the CME. Earlier, the price reached 84.65 cents, the highest level for a most-active contract since May 14. The commodity has jumped 29% this year.

US wholesale-pork prices rose 3% in the past two sessions, boosting hog futures, Smith said. Pork climbed to 83.74 cents a pound on June 18 after touching a nine-week low on June 16, according to the USDA.

Meanwhile, cattle futures for August delivery rose 1.125 cents, or 1.3%, to 89.325 cents a pound. Earlier, the price reached 89.725 cents, the highest level since June 4. The commodity has gained 3.7% this year. Feeder-cattle futures for August settlement increased 1.525 cents, or 1.4%, to US$1.117 a pound.

Wholesale choice beef climbed 0.4% at midday to US$1.5453 a pound, the highest level since June 10, according to the USDA.

Cattle futures fell in the previous two sessions before a report showed US feedlots bought 23% more cattle in May than a year earlier. Declines may have been exaggerated because the USDA data was in line with analysts' estimates, analysts said.