Chicago | Reuters — U.S. lean hog futures sagged on Thursday as the confirmation of record-large weekly pork export sales to China failed to impress traders who have been expecting a surge in demand for months.
Uncertainty about when the pork will be shipped to China also kept a lid on gains, traders said.
The U.S. Department of Agriculture reported U.S. pork sales to China for shipment this year were 18,810 tonnes during the period from Sept. 27 to Oct. 3 and 123,362 tonnes for shipment in 2020.
“We don’t know the terms,” said Bob Brown, an independent U.S. livestock market analyst. “It says 2020. It could be spread out over the whole year.”
U.S. pork sales have largely fallen short of expectations so far this year, following forecasts for massive Chinese imports due to an outbreak of a fatal pig disease.
Chinese domestic prices are soaring as the African swine fever virus has decimated the country’s hog herd, tightening supplies of China’s favourite meat.
But Beijing has imposed hefty 72 per cent tariffs on imports of U.S. pork in retaliation for U.S. duties on Chinese goods, slowing U.S. sales.
Still, U.S. prices look attractive compared to those for pork from the EU, a main supplier to China, Brown said.
Some traders were expecting USDA to report there were even bigger sales ahead of U.S.-China trade talks this week, said Mike Sands, president of MBS Research.
“To the extent that those numbers were floating around ahead of time, it might have built in an expectation that this week’s weekly trade data would show us a higher number,” he said.
CME December lean hog futures settled down one cent at 68.475 cents/lb.
CME cattle futures closed mixed.
USDA reported net export sales reductions of U.S. beef for 2019, a marketing-year low. Traders were separately keeping an eye on wintry weather that could hit feedlots in the central United States.
CME most-active November feeder cattle futures settled down 0.125 cent at 144.125 cents/lb. after reaching the highest price since May 24 on Wednesday.
December live cattle futures ended up 0.25 cent at 111.425 cents/lb. after notching a two-month top at 112.2 cents on Wednesday.
Boxed beef prices rose for choice and select cuts.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.