U.S. livestock: Hog futures recover on hopes for China trade deal

Chicago | Reuters — U.S. hog futures shook off early losses to end mostly higher on Thursday as fears about rising acrimony between Washington and Beijing gave way to hopes that negotiators may be able to hammer out a deal to end the U.S.-China trade war.

U.S. President Donald Trump said it was possible the U.S. could reach a trade deal with China this week, as two-day talks were set to begin in Washington.

U.S. farmers and traders are paying close attention to the negotiations because China and Hong Kong were the second biggest export market for U.S. pork prior to the start of the trade war.

Related Articles

Shipments of U.S. pork to China declined after Beijing last year raised tariffs on imports from the United States to 62 per cent as part of the tit-for-tat trade war.

“Trump indicated a trade deal can still be done,” said Dennis Smith, broker for Archer Financial Services in Chicago. “This brought the hogs to life.”

June lean hog futures closed 1.45 cents higher at 90 cents/lb. at the Chicago Mercantile Exchange, after trading as low as 85.975 cents (all figures US$). July lean hogs settled up 0.225 cent at 90.975 cents, after touching its lowest price since March 15 at 87.85.

Traders remained nervous about the trade talks, though, because the United States is set to increase its tariffs on $200 billion in Chinese goods to 25 per cent from 10 per cent at 12:01 a.m. ET Friday. China is expected to retaliate.

U.S. farmers have been waiting to see whether China will further increase purchases of U.S. pork despite Beijing’s existing tariffs.

China will need to boost total imports to make up for tens of millions of hogs killed in an outbreak of the fatal pig disease African swine fever, according to analysts.

Yet China bought only 800 tonnes of U.S. pork in the week ended May 2, out of total U.S. export sales of 21,800 tonnes, the U.S. Department of Agriculture said on Thursday.

“They’re not coming to us right now to fill the gap” in supply left by African swine fever, a broker said.

CME June live cattle futures ended 0.875 cent higher at 111.95 cents/lb. August live cattle rose 0.2 cent to 107.6 cents/lb.

August feeder cattle advanced 0.6 cent to 144.475 cents/lb., while September feeder cattle closed up 0.425 cent at 145.275 cents.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

About the author

Glacier FarmMedia Feed

Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.

Comments

explore

Stories from our other publications