January 27, 2021

CME lean hog futures climb to record highs

Lean hog futures on the Chicago Mercantile Exchange (CME) reached a new contract high this week following fears of slim US supplies, Reuters reported.

Analysts said US cold storage data was supportive for hog and cattle futures. The US Department of Agriculture (USDA) said frozen pork supplies was down 4% on December 31, 2021 compared to the year prior, while frozen beef supplies were also 6% lower year-on-year.

Major meatpackers have found it difficult to restock pork inventories after the COVID-19 pandemic led to a temporary shutdown of slaughterhouses back in spring 2020. Swine-related diseases have also resulted in declining domestic swine herds.

Lean hogs on CME April closed 1.925 cents at 97.250 cents per pound, setting a new contract high at 97.375 cents. It has increased 16% since reaching a three-week low on January 11, 2022.

The USDA said wholesale pork carcass cut-out value fell by US$3.20 to US$92.46 per cwt.

-      Reuters