Chicago | Reuters — U.S. lean hog futures fell for a second consecutive session on Tuesday on concern over a trade truce agreement reached over the weekend between the U.S. and China, the world’s top hog and pork market.
Global stock markets tumbled on Tuesday as optimism waned that the U.S. and China could quickly resolve their trade dispute.
At a meeting between the world’s top two economies 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. U.S. pork and soybeans were expected to represent the bulk of that buying.
“The hogs and the S+P are going down, taking risk premium out of the market because of disappointment in the overall U.S.-China trade deal,” said Mike Zuzolo, president of Global Commodity Analytics.
U.S. President Donald Trump said he was open to extending the 90-day trade truce window but also warned he would revert to tariffs if the two sides could not resolve their differences.
China is expected to need large pork imports as vast numbers of its domestic hogs have been culled due to the spread of African swine fever to farms across the country. But steep import duties imposed on U.S. pork during the tit-for-tat trade fight remain in place.
Chicago Mercantile Exchange February lean hogs settled down 0.85 cent at 66.05 cents/lb. while April fell 0.475 cent at 70.75 cents (all figures US$).
Live cattle futures were higher, lifted by firm beef prices and expectations for at least steady cash cattle sales this week. Harsh U.S. Plains weather also underpinned the market as snow and frigid temperatures were seen slowing cattle growth and movement.
CME February live cattle futures settled up 1.475 cents at 121.65 cents/lb. January feeder cattle futures ended down 0.1 cent at 144.4 cents.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.