Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures traded on both sides of previous levels on Thursday and closed mixed as the market weighed ample hog supplies against some signs of improved pork export demand.
Hog traders were encouraged by large pork purchases by China and Mexico in weekly U.S. Department of Agriculture (USDA) export sales data, but remained cautious as supplies remain abundant and trade ties with both key trading partners have been strained.
CME June lean hog futures closed 0.225 cent lower at 89.425 cents/lb. while actively traded July hogs ended down 0.1 cent at 90.95 cents (all figures US$). Deferred contracts were down 0.1 cent to up as much as 0.35 cent.
USDA reported 46,300 tonnes in pork export sales in the week ended May 16, the largest in six weeks. The sales included 5,700 tonnes to Mexico and 31,400 tonnes to China, just a week after China canceled 3,200 tonnes in purchases, according to USDA data.
“We have no shortage of supply and we’re very dependent on our export market improving,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
“Last week we had a big cancellation by China and this week we had a purchase, so we don’t have a consistent purchase record going yet. One week doesn’t change that,” he said.
China has ramped up pork imports this year as its domestic hog herd has been ravaged by African swine fever. But U.S. pork exporters have not fully capitalized on the heightened demand due to steep Chinese import tariffs on U.S. shipments.
Pork imports by China from all origins jumped 24 per cent in April, official customs data showed.
CME live cattle and feeder cattle futures were mostly firm in a technical bounce from several days of declines. A downturn in corn feed prices further underpinned feeders.
Cattle markets were anchored by weaker cash cattle prices, with sales at U.S. Plains feedlot markets this week at about $114-$115/cwt.
Traders also squared positions ahead of Friday’s monthly USDA cattle on feed report, which is expected to show April placements up 13 per cent from a year ago and total May 1 on-feed supplies up 2.9 per cent.
June live cattle rose 0.15 cent to 110.8 cents/lb., while actively traded August was up 0.2 cent at 108.15 cents.
August feeder cattle finished up 0.425 cent at 143.025 cents per pound and September feeders gained 0.125, to 144 cents.
— Reporting for Reuters by Karl Plume in Chicago.