June 30, 2021
Hog futures contracts decline 14% in June as China recovers from ASF
Hog futures contracts have dropped 14% this month as China's herds recover from the 2018 outbreak of African swine fever more quickly than expected, according to the Wall Street Journal.
Cooling hog prices come after a wild run-up over the past year. Between April 2020 and this month's highs, futures contracts surged 183%. Consumers have begun to feel the pinch, with pork prices at US grocery stores rising 5.4% year-on-year in May, according to NielsenIQ.
Earlier this month, China’s agriculture ministry said hog herds grew 23.5% in May year-on-year, reaching 98.4% of 2017 stocks. The ASF outbreak ravaged the country's pig population, 40% of which died off or were culled in 2019.
As more supply has come online, Chinese domestic hog prices have fallen precipitously, in part because the pork rebound has come ahead of schedule, according to the Wall Street Journal. A full rebound hadn't been expected until 2023, and the good news has triggered panic selling.
- Markets Insider