U.S. livestock: Trade fears drag down CME live cattle, hogs

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle and hog futures closed lower on Thursday, partly weakened by uncertainty over U.S. trade with China, traders said.

China on Thursday urged the U.S. to make a “wise choice” on trade, saying it was ready to respond in case Washington chose confrontation, as U.S. President Donald Trump prepares to decide whether to impose tariffs on Chinese goods.

China had already hiked tariffs on U.S. pork and may threaten to do the same for beef, said traders and analysts.

“The fatigue of the too-frequent threat of global agricultural trade disruption seem to be wearing on U.S. agricultural commodity prices today,” said Cassandra Fish, author of industry blog The Beef.

CME live cattle futures selling intensified after packers in Nebraska on Thursday paid $110/cwt for a small number of market-ready, or cash, cattle — $4 to $5 lower than last week.

Packer bids for other cattle in Nebraska and elsewhere in the U.S. Plains were at $110 versus $117-$120 asking prices.

Increased week-over-week cattle weights, which adds more tonnage to already ample supplies, discouraged CME live cattle market buyers. And, funds liquidated long positions after futures fell below technical support levels.

June live cattle closed 1.675 cents/lb. lower at 106.25 cents (all figures US$). August ended down 2.025 cents at 101.875 cents.

Technical selling and lower live cattle futures sank CME’s feeder cattle contracts.

August closed down 2.025 cents/lb. at 143.625 cents.

Hog futures turn lower

Profit-taking and trade jitters sent CME lean hogs lower after two days of gains, driven by upward-trending cash and wholesale prices, traders said.

“The hog market was so overbought that we needed to have some type of correction,” said Midwest Market Solutions president Brian Hoops.

Packers scrambled for supplies that have tightened seasonally due to hot weather in parts of the Midwest that slowed hog weight gains, a trader said.

Grocers and restaurants are preparing to buy meat for Fourth of July holiday cookouts, he said.

Hog futures felt more pressure from selling in the live cattle market. And July future’s premium to cash prices was more pronounced after the June contract expired.

June hogs, which expired at noon CT, settled up 0.175 cent/lb. at 81.175 cents. Most actively traded July ended 1.15 cents lower at 81.625 cents. August closed 1.05 cents lower at 78.6 cents.

— Reporting for Reuters by Theopolis Waters in Chicago.

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