Export sales of American pork soared to an all-time high last week as buyers stock up in anticipation of a widening protein gap created by the spread of a pig-killing disease in Asia.
"They're simply front-running the Chinese with everyone becoming fully aware of the demand wave about to hit," Dennis Smith, senior account executive at Archer Financial Services, said in an email.
Livestock traders who have been waiting for months for China to start stepping up imports of U.S. meat got their first taste of the buying last week. This week's data signals the tightening in global protein markets may be gathering pace.
Export sales jumped to 351,000 metric tons as Mexico and China each snapped up the biggest weekly hauls in U.S. Department of Agriculture data going back to 2013. China's weekly purchases of 152,600 tons tops the previous record of 142,200 tons from just a week ago.
The Asian country continues an aggressive meat-import program as African swine fever devastates herds. China has also pledged to boost imports of American agriculture goods such as pork and soybeans amid thawing tensions in the U.S.-China trade war. That as the world's biggest pork producer sees domestic output plunge the most since at least 2009.
Mexico, typically the top buyer of U.S. pork, bought 132,400 tons for the week, almost double the previous record set in mid-2014. Japan's purchases also surged.
Some traders were skeptical of the data due to the massive scope of the sales. December hog futures in Chicago turned lower after earlier surging as much as 2.7%. The contract was down 1.4% to 67.175 cents a pound at 10:09 a.m. Chicago time.
The USDA updated the sales report on its website to include a note stating the pork data accurately reflects information reported to the agency by exporters and may include sales that occurred in previous weeks but were not previously reported to the government.
Dan Norcini, an independent livestock futures trader in Coeur d'Alene, Idaho, said some shippers may be intentionally withholding data "so as not to have speculative traders like me pushing hog prices higher."