--Most hog futures down on announcement of new vaccine for
treating PEDv
--Modest gains in wholesale pork prices supporting front-month
contract
--Cattle futures all higher ahead of trade in the cash
markets
By Kelsey Gee
CHICAGO--News that another animal health company will be
offering a vaccine for a deadly swine virus that has killed
millions of pigs since first entering the U.S. is weighing on U.S.
hog futures early in the trading session Wednesday.
Most contracts are under pressure as traders seize on
expectations for producers to have an easier time managing porcine
epidemic diarrhea virus, or PEDv, which veterinarians say spreads
more rapidly in cooler temperatures.
October hog futures recently advanced 0.17 cent to $1.0005 cents
a pound at the Chicago Mercantile Exchange, supported by recent
gains in the wholesale pork market. If retailers are willing to pay
up for hams, loins, and other products, processors have more
incentive to bid for hogs in the cash markets. December lean-hog
futures are down 0.72 cent, or 0.8%, to 92.67 cents a pound. Other
contracts are falling further.
Hog futures this year rallied for months as investors braced for
PEDv to dramatically reduce supplies of market-ready animals. While
millions of pigs have died from the disease since last spring,
producers have fed hogs to heavier weights, producing larger
volumes of pork in the meantime. As the number of hogs available to
processors has grown, hog futures have tumbled nearly a third since
mid-July.
Animal health company Zoetis Inc. said it received a conditional
license from the U.S. Department of Agriculture for a PEDv vaccine,
which it expects to be available to veterinarians this month. The
news from Zoetis, which was spun off from Pfizer, Inc. last year,
follows the conditional approval in June of another PEDv vaccine
offered by Harrisvaccines Inc., a small company based in Ames,
Iowa.
"Many people have been looking for a re-escalation of PEDv cases
[killing new litters of pigs] during the winter," said Adam Stout,
an analyst with brokerage INTL FCStone in Kansas City, Mo. "Zoetis
has more money to throw behind research and development of a
disease [than Harrisvaccines] so it seems that we're making
progress at managing PEDv, if nothing else."
Shares of Zoetis rose as much as 3.3% Wednesday to $36.65, a new
52-week high for the stock.
Cattle futures are all higher ahead of trade in the cash
markets, after prices last week climbed amid tight available
supplies. Most-active October live-cattle are up 1.275 cents to
$1.5370 a pound. Most-active feeder-cattle futures for October
recently gained 1.275 cents to $2.2010 a pound.
Write to Kelsey Gee at kelsey.gee@wsj.com
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