Hog prices shot to a three-month high on Friday, trading over 60 cents per pound for the first time since May.
Pork is getting pricier as foreign buyers, especially China, look to the U.S. to supply their meat demand. China lost millions of pigs last year to an epidemic, African swine fever, leaving them facing a pork shortage.
Meanwhile, U.S. slaughterhouse demand is finally returning to pre-COVID levels. For months, U.S. meatpackers had slowed down or shuttered plants as a result of COVID outbreaks in their tightly packed facilities. Rising domestic demand is helping hogs rebound from the abysmal low they reached in April of 37 cents.
Despite the 60% price gain seen since April, Friday’s price of 59.5 cents per pound for October lean hog futures is still too low for many pig farmers to make a profit, leaving them hoping for even more demand.
Unfortunately, they likely won’t see the demand from American grocery shoppers, who have been slowing their meat purchases and are likely to buy even less after Labor Day, traditionally the end of the summer grilling season.
**Beans Climb on Exports
Soybeans exceeded a two-year high on Friday, valued over $9.70 per bushel.
The market has been soaring higher predominantly on Chinese demand; China is the world’s largest soybean importer and has been aggressively contracting to buy this fall’s U.S. soybean harvest. China broke records with its purchases of last year’s crop and is expected to buy even more this year.
Despite its protestations that China has sufficient food, the Asian giant was the top buyer of U.S. corn, wheat, and pork exports last week as well.
Looking ahead, the size of this fall’s bean crop is still in doubt, but farmers will begin harvesting in the coming weeks, giving a clearer picture to the upcoming supply. Meanwhile, Brazil is beginning to plant what could be the world’s largest soybean crop in history, a factor that could weigh on prices next spring after their harvest.
As of midday Friday, November soybeans traded for $9.68, a price that will continue to be reactive to foreign factors.
The Chicago commodity exchanges will be closed on Monday due to the Labor Day holiday.