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LIVESTOCK-CME hog futures push higher as herds in China suffer from virus

By Tom Polansek

CHICAGO, April 15 (Reuters) - U.S. hog futures closed mostly higher on Monday on increasing expectations that China will need to import more pork to compensate for hogs killed in an outbreak of an incurable swine disease.

The front-month contract, which is thinly traded, set its highest price in about 21 months as the market rose for the fourth consecutive session.

The gains were fueled by worries about an epidemic of African swine fever in China, home to the world's largest hog herd. The country has reported about 120 cases of the disease since it was first detected there in early August 2018.

There is no vaccine for the disease, which does not affect humans but is highly contagious and fatal to pigs.

China's pig herd declined 18.8 percent in March compared with the previous year, the Ministry of Agriculture and Rural Affairs said over the weekend, as African swine fever ravaged the country's vast herd.

China's sow herd dropped 21 percent in March from the same period a year earlier, according to the data collected by the ministry from 400 counties across the nation.

The losses represent dramatic changes in China's supply, said Dennis Smith, broker for Archer Financial Services in Chicago.

"The real numbers are probably even bigger than that," Smith said.

Front-month CME May lean hog futures closed up 0.475 cent at 90.075 cents per pound and set the highest price for a nearby contract since July 2017.

Most-active CME June lean hog futures slipped 0.200 cent at 98.300 cents per pound. Deferred contracts ended higher.

Traders and analysts expect that China will need to further increase its imports to make up for hogs killed by African swine fever or culled to prevent the spread of the disease.

China's purchases of U.S. pork in the week ended April 4 climbed to the highest in at least six years, according to U.S. Department of Agriculture data reported on Thursday.

"Last week's weekly export number is still vibrating through the trade," Smith said.

CME live cattle and feeder cattle futures also closed higher, buoyed by strength in the hog market and expectations of improving beef demand.

Benchmark CME June live cattle futures rose 0.025 cent to close at 121.475 cents per pound and front-month April settled down 0.250 cent at 126.300 cents.

April feeder cattle futures rose 0.250 cent to 145.675 cents per pound while May feeders rose 0.525 cent at 151.025 cents. (Reporting by Tom Polansek in Chicago Editing by Phil Berlowitz )

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