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Lean Hogs Rising on Chinese Demand

June 14, 2016 at 18:53 by Brent Lantzy

The June lean hogs contract is at 81.700 cents per pound on the CME as of 18:20 GMT, down 0.125 cent from yesterday’s settlement at 81.825 cents, as the contract finishes its final hour of trading before expiration.

July contracts are up 2.775 cents to 88.875 as of 18:20 GMT. The highest-volume August contract is touching new highs, trading at 90.000 cents per pound, up 2.175 cents from the prior settlement at 87.825 at 18:20 GMT.

Commitments of Traders data for the week ending on June 7 show net-long positions in hog futures and options jumped 20% to 57,205 contracts, according to data released by the Commodity Futures and Trading Commission. Open interest for futures reached a two-year high last week.

Hog futures have been lifted by the recent strong pace of US exports to China. Pork exports to mainland China, including variety meats, swelled 117% in 2016-through-April compared to the prior year, according to statistics from the US Meat Export Federation.

China’s domestic demand for pork has heavily Toddler Bounce House outpaced local supply. The time required for China’s domestic production to meet local demand may be increased with recent government crackdowns on environmental regulation violations and an effort to move production to larger and more modern facilities.

Many US farmers seeing lucrative export opportunities are adapting their farming techniques to remove the weight-increasing feed-additive ractopamine, which has been banned in China. Such measures are necessary in order for US producers to compete with other major producers in Europe, Brazil, and Canada.

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