Hog Futures Extend Gain on Outlook for China Demand; Cattle RiseJen Skerritt
Hog futures rose for a second day on mounting speculation that China’s proposed purchase of Smithfield Foods Inc. will boost demand for U.S. pork. Cattle also advanced.
Shuanghui International Holdings Ltd. announced May 29 it agreed to acquire Smithfield, the largest U.S. hog producer, to increase meat supplies for China, the world’s biggest pork consumer and the No. 3 buyer of U.S. exports. Wholesale-pork prices are up 15 percent this year, and hog futures gained 9.5 percent and touched a 10-month high yesterday.
“The Smithfield story is giving the market a shot in the arm with a lot of enthusiasm, with good pork-export business down the road,” Dennis Smith, senior account executive at Archer Financial Services Inc., said in a telephone interview from Chicago.
Hog futures for July settlement climbed 0.4 percent to close at 93.85 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. Yesterday, prices reached 94.375 cents, the highest for the most-active contract since July 9. Prices rose 1.4 percent in May, the third straight monthly increase.
Cattle futures for August delivery rose 1.2 percent to $1.20450 a pound on the CME. Prices dropped 1.2 percent in May, the fourth straight monthly decline, the longest slump since 2009, and are down 9 percent this year.
Feeder-cattle futures for August settlement rose 0.1 percent to $1.44325 a pound.