Chicago | Reuters — Some deferred-month Chicago Mercantile Exchange lean hog futures settled down their three-cent-per-pound daily price limit on Monday after China raised tariffs on U.S. pork by another 25 per cent, said traders.
Late on Sunday China announced higher duties on U.S. pork and over 100 other products that went into effect on Monday, in response to higher tariffs imposed by the U.S. on imported Chinese steel and aluminum.
China/Hong Kong in 2017 was the second-largest volume destination for U.S. pork at 495,637 tonnes, according to the U.S. Meat Export Federation.
“We are disappointed that China has placed an additional 25 percent tariff on U.S. pork exports,” the National Pork Producers Council (NPPC) said in a statement on Monday.
The group said it hopes the newly imposed tariff will be short lived as both countries continue negotiations.
Meanwhile prices for slaughter-ready, or cash, hogs slid for an 11th straight session as moderating spring temperatures in parts of the Midwest allow pigs to add weight faster.
A few packers were closed in observance of Easter Monday.
Investors digested last Thursday’s U.S. Department of Agriculture quarterly hog report that showed record numbers of hogs on U.S. farms during the December-February period.
April hogs closed down 2.975 cents/lb. at 54.275 cents (all figures US$). May and June finished limit down at 64.825 and 73.55 cents, respectively.
CME lean hogs’ trading limit will expand to 4.5 cents on Tuesday.
Live cattle hit five-month low
CME live cattle hit a five-month low on weaker cash price expectations and burdensome supply outlook, said traders.
Renewed worries about a trade war sent the U.S. stock market tumbling, and dredged up concerns that the Chinese may also slap higher tariffs on U.S. beef.
After years of lobbying, China in June of last year ended its 14-year ban on U.S. beef over worries about mad cow disease.
“It’s (China) is still a small but growing market for U.S. beef, especially given their rising middle class,” a trader said.
Market participants await this week’s cash prices that a week ago sold for mostly $120-$121/cwt, down $5 from the week before as supplies begin to build seasonally.
April live cattle closed down 1.35 cents/lb. at 112.4 cents, and June ended down 1.625 cents at 100.95.
CME feeder cattle followed lower live cattle futures; April closed 1.45 cents lower at 131.875 cents.
— Reporting for Reuters by Theopolis Waters in Chicago.