Hunan drought conditions ease; Hog futures dive amid rising Covid cases

Drought conditions ease in hard-hit Hunan

Drought conditions in southern Hunan province have eased after several months of severe drought. During periods in September and October nearly 100% of the province was categorized as having severe drought conditions. This has fallen to 18% now, and is expected to further ease.

The most severely affected area was Xinhao county, which was categorized as being in severe drought conditions for 104 consecutive days.

During the drought the provincial government said it also had worked to do 385 cloud seeding operations.

Hunan drought severity by area (Unit 10k hectares)

Hog futures dive to five-month low, palm oil rebound on short covering

Live hog futures on Dalian Commodity Exchange (DCE) dived on Wednesday as Beijing banned in-door dining at restaurants and other cities in China also tightened Covid restrictions.

The main hog futures contract (January 2023) sank more than 3% on the day to the lowest point since mid-June this year as demand concerns loomed larger.

Egg futures also edged marginally lower against the backdrop of weaker demand expectations.

According to several Beijing-based traders, staff has been asked to work remotely from home as Covid case count in the capital continued to tick higher.

The tightening of Covid curbs came shortly after a series of easing measures were announced earlier this month, marking a sharp U-turn on China’s Covid policy, which surprised investors.

Oilseed futures mainly drifted sideways on Wednesday but palm oil futures on DCE rebounded strongly thanks to short covering activities, pulling soybean oil futures higher.