November 22, 2007

US hog prices jump as China seen to purchase more pork

US pork prices rose higher on Tuesday on speculation that China may buy more pork soon, analysts and livestock traders said.

Smithfield, the nation's largest hog and pork producer, denied it made any new deals for pork with China.

However, Chicago Mercantile Exchange hog futures prices were up the daily trading limit and Smithfield's shares were up more than 3 percent at the New York Stock Exchange.

In August, Smithfield announced to sell 60 million pounds of pork to China for delivery on December. China is expected to buy more US pork, although there are no specific details yet.

From January to September this year, China and Hong Kong bought nearly 105,200 metric tonnes of US pork, up 71 percent from last year, according to the US Meat Export Federation.

The figures moved China/Hong Kong ahead of Canada as the third largest export market for US pork so far this year.

The United States has a huge hog herd that created a surge in pork production this year. USDA estimated Monday's hog slaughter at 430,000 heads, which would be a record for one day if confirmed.

Pork exports will be critical in the months ahead to take the pork supplies off the market and prevent a severe drop in hog prices, analysts said.