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U.S. livestock: CME lean hogs recover on bargain buying, trade hopes

Cattle futures hit pause on recent rally

Chicago | Reuters — Chicago Mercantile Exchange lean hog futures rallied on Tuesday in a technical and bargain-buying rebound from one-month lows amid hopes that China would step up U.S. pork imports as the country’s domestic pork prices have soared.

The hog herd in China, the world’s largest pork market, has been decimated by African swine fever, and prices for China’s favorite meat have jumped sharply.

But Chinese importers have bought only modest amounts of U.S. pork in recent months, and steep retaliatory tariffs on U.S. shipments remain in place.

The two nations are working to resolve their 15-month trade war with talks in Washington this week, although expectations for a comprehensive deal are low after the White House blacklisted several Chinese tech firms on Tuesday.

“The big news today is the sharp increase in Chinese pork values,” said Ted Seifried, chief market strategist for Zaner Ag Hedge in Chicago.

“They’ve been saying they would release more pork out of state reserves to keep control of prices and explore other trade options. That doesn’t seem to be working so now we’re feeling very optimistic again about getting some bigger exports to China,” he said.

Jitters about U.S.-China trade talks weighed on hog futures on Monday, sending prices down the daily three-cent trading limit. The limit was expanded to 4.5 cents on Tuesday and futures recovered all of those losses and more.

CME December lean hog futures opened lower but rallied to end up 3.15 cents at 67.4 cents/lb., the contract’s first gain in six sessions.

Cattle futures ended mixed as a recent rally from nine-year lows set in mid-September paused as the market awaited weekly cash market sales to develop.

Cattle bids at feedlot markets in the central and southern U.S. Plains were not well established on Tuesday, although some traders expect cash sales this week to be at least steady with week-ago levels.

CME December live cattle futures closed down 0.35 cent at 110.85 cents/lb. after hitting a two-month high on Monday.

November feeder cattle futures closed 0.325 cent higher at 141.25 cents/lb.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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