U.S. livestock: Hogs, cattle extend declines on trade war worries

Chicago | Reuters — U.S. livestock futures fell one per cent or more on Wednesday, extending declines on technical selling and fears reduced pork and beef exports could result in burdensome supplies in domestic meat markets, traders and analysts said.

Most Chicago Mercantile Exchange lean hog futures contracts slumped to lifetime lows for the third straight session while live cattle futures declined for the seventh consecutive session.

The lower livestock prices came as many other commodities from corn to soybeans to crude oil fell sharply in the wake of the Trump administration’s announcement Tuesday of a new round of tariffs against China, a move Beijing said it would retaliate against.

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“Everyone is running scared,” Steiner Consulting Group analyst Altin Kalo said of cattle and hogs traders. “This whole thing with the tariffs is escalating and it seems there’s no end in sight, and it looks like (agriculture commodities) are taking the brunt of it.”

Two major buyers of U.S. pork, China and Mexico, have imposed tariffs on American imports of the meat, and the hog industry that has expanded in part to cater to the export market now was faced with the potential of too much supply.

“That’s the worry here — we have protein we need to sell,” Kalo added.

The U.S. Department of Agriculture will update meat and livestock supply and demand forecasts in a monthly report on Thursday, in data expected to take the import tariffs into account.

Most-active CME August lean hog futures fell 0.975 cent to 68.8 cents/lb. while deferred contracts for hog prices this autumn, which could be more affected by the tariffs than the prompt supplies, notched even larger declines. December hogs plummeted 3.475 cents, to 46.625 cents/lb.

CME August live cattle eased 1.6 cent to 103.85 cents/lb. and CME August feeder cattle was down 2.45 cents to 149.4 cents/lb., with each contract declining to the lowest level since June 29.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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