Hog futures newfound strength may be tied with what is going on with the pork industry in the European Union – a decade low feed demand poised for another significant decline. Hog futures are down .42 cents today currently trading at $67.30 (CWT) at the Chicago Mercantile Exchange.
There is reportedly a contraction happening in the EU pork industry in part by Russia banning imports which is helping to cause compound feed used by pig farmers to be expected to drop 2-3% this year. Hog prices in the EU – according to the government’s reference price – touched a 10-year low of E126.02 per kilogram just last month.
“While the European Union continues to see hog (futures) prices falling, here in Chicago a support-base had been made between mid-November to mid-December and has been rallying since,” said Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, sharing her fundamental assessment of the hog futures market. Bourbeau added, “This reflection in demand can only mean one thing: our US hog (futures) market is preferred over the EU pork industry.”
Hog futures trend is up since early this month. This could be a technical bounce for hog futures in an overall down-trend, but right now pork prices are in the middle of six-month highs and lows.
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