Chicago | Reuters — U.S. lean hog futures closed mostly lower on Monday in a profit-taking setback from near two-highs as traders awaited further confirmation of pork purchases by China following a thaw in tense trade relations over the weekend.
At a gathering of G20 countries in Argentina on Saturday, the White House agreed to delay new tariffs during a 90-day truce period, while Beijing pledged to purchase more agricultural products from U.S. farmers immediately.
Hog futures bounded higher as trading opened for the week as investors speculated that pork would be among the primary products purchased and after surprise pork sales to China in weekly U.S. government export sales report last week.
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China has also seen vast numbers of its domestic hog herd culled due to African swine fever that has struck dozens of farms across the world’s top hog and pork producing country.
But buying enthusiasm faded as details of China’s buying plan remained very limited and as Beijing has yet to lower its steep import tariffs on U.S. pork shipments.
“We had an initial positive reaction this morning on the trade news. But in the absence of anything concrete, it was walked back a bit,” said Matthew Wiegand, broker with FuturesOne.
“Until we see some more follow-through on the Chinese commitments, it’s going to be a tough climb,” he said.
Chicago Mercantile Exchange February lean hogs settled down 0.65 cent at 66.9 cents/lb. while April fell 0.75 cent at 71.225 cents (all figures US$).
Live cattle futures ended lower on seasonally muted packer demand in the cash market and adequate supplies of fed cattle available. Harsh Plains weather limited declines as snow and frigid temperatures were seen slowing cattle growth and movement.
Feeder cattle, meanwhile, slumped as higher corn futures prices suggested higher production costs.
CME February live cattle futures settled down 0.325 cent at 120.175 cents/lb. January feeder cattle futures ended down 0.725 cent at 144.5 cents.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
