CME update: short covering and bargain buying lift lean hog futures
Reuters reports that the bargain-buying and short covering have boosted hog futures, but traders remain cautious as they monitor broadening COVID-19 restrictions and pandemic relief negotiations in Washington.
Gains in both markets were tempered by sinking meat and cash livestock prices, and by concerns about domestic demand as rising US coronavirus infections have forced closures of dine-in restaurants and food service outlets.
"We've got restaurants closing down for dining in ... People don't usually get takeout ribeyes or New York strips," said Karl Setzer, commodity risk analyst with AgriVisor, referring to high-end beef cuts that rely on restaurant traffic.
"We have good export though, and our export market is making up for the loss that we would probably be seeing in futures from the domestic market," he said.
Beef export sales through late November are 5.5 percent ahead of the same time a year ago, while pork export sales are up 18.1 percent, according to the US Department of Agriculture (USDA).
The agency is due to release updated weekly export sales figures early on Thursday 10 December.
Benchmark February lean hog futures settled 0.675 cent higher at 66.275 cents per pound.
The composite pork carcass cut-out shed 52 cents on Wednesday to $77.60 per cwt according to USDA data.