CME update: lean hog futures hit contract high on strong demand

US lean hog futures rose to a contract high on strong demand and technical buying on 2 February.

Reuters reports that Chicago Mercantile Exchange April lean hog futures settled up 2.575 cents at 78.075 cents per pound. The contract traded up to 78.225 cents, topping a previous life-of-contract high of 77.600 cents from last Tuesday, 26 January.

"It's more of a demand story today than anything else," said Altin Kalo, agricultural economist for Steiner Consulting. "That's what's driving the livestock." "Meat prices have really escalated, and it's certainly caught a lot of people by surprise," Kalo said.

In China, the world's top pork consumer, the government has stepped up sales of pork in the run-up to the Lunar New Year holiday, which starts next week, when meat consumption typically peaks in the country.

Beijing will sell 30,000 tonnes of frozen pork from state reserves on 4 February, and another 30,000 tonnes on 9 February, according to a notice by the China Merchandise Reserve Management Centre.

China has grappled with outbreaks of a deadly hog disease, African swine fever, since it was detected there in August 2018, raising the need for meat imports.

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