November 23, 2007

Hog futures fall as China halts pork buying

Hog futures fell from a seven-week high as China failed to speed up purchase of US pork, contrary to what some analysts anticipated.

China, the sixth-largest buyer of US pork, has yet to disclose any major purchase since agreeing in August to buy 27,000 metric tonnes from Smithfield Foods Inc., analysts said.

Hogs jumped 4.7 percent yesterday, the most in a week, on speculation another Chinese purchase was imminent.

Hog futures for February fell 0.25 cent, or 0.4 percent, to 62.75 cents a pound on the Chicago Mercantile Exchange.

The most-active contract, down 5.7 percent from a year ago, gained 23 percent since Nov. 6 on speculation that demand for US pork will increase.

Smithfield Foods will open its pork-processing plant in Sioux City, Iowa, on November 25, Sunday.

However, the company's spokesman, Jerry Hostetter, said their increase in pork production is not related to a special order from China.