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National & World Ag News Headlines |
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China's Live Hog Futures Tumble on Expectations of More Supply
USAgNet - 01/12/2021
China's newly launched live hog futures tumbled to reach limit down on their second day of trading on the Dalian Commodity Exchange on expectations that the hog herd size will increase as new farms start up.
According to Reuters, the front-month September contract closed 8% down at 26,030 yuan/tonne ($4,019.95) on Monday, after falling nearly 13% on its debut on Friday.
"The live hog prices are relatively high, and it is the industry consensus to go short on the futures, to hedge, as the market expects pork prices to fall sharply this year," said Wang Xiaoyang, senior analyst with Sinolink Futures.
China, the world's top pork consumer and producer, launched live hog futures on Friday, its first physically delivered live-animal contract, making it the second market globally to trade mainstream live hog futures after the United States.
"It is expected that the hog futures will keep falling," Wang added.
Launch of the live hog futures came after the deadly African swine fever hit China more than two years ago, which slashed its massive pig herd and sent pork prices soar to record high levels.
China's pig herd is now approaching normal levels, state media said, as corporate pig producers rushed to build large farms to benefit from high prices.
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