January 12, 2021
Live hog futures on China's Dalian Commodity Exchange falls further on second trading day
China's recently launched live hog futures on the Dalian Commodity Exchange dropped further on the second day of trading following expectations that swine supply will increase as new swine farms are opened, Reuters reported.
On January 11, the front-month September contract closed at CNY 26,030 (~US$4,019.95; CNY 1 = US$0.15) per tonne, 8% lower. It fell close to 13% on its debut on January 8.
Wang Xiaoyang, a senior analyst with Sinolink Futures, said live hog prices are high, and the industry has agreed to go short on the futures as the market projects prices of pork to drop significantly in 2021.
Wang said hog futures are expected to drop further.
China's state media said the country's swine herds have recovered to normal levels, as major swine producers constructed large farms to benefit from record high prices.
China's live hog futures on the Dalian Commodity Exchange is the country's first physically delivered live-animal contract and the second market in the world to trade mainstream live hog futures after the United States.
China is the biggest pork consumer and swine producer in the world.