You are here

Hogs tumble on export uncertainty amid US-China trade war

[CHICAGO] Chicago Mercantile Exchange (CME) lean hog futures fell sharply on Friday on weak pork prices and concerns about export demand as trade tensions have increased between the United States and China, the world's largest hog and pork market.

Traders squared positions ahead of the long Memorial Day holiday weekend due to the uncertain political climate. Futures markets will be closed on Monday.

"Going into the long weekend with the recent political environment there was concern that we could get a surprise," said Matthew Wiegand, broker with FuturesOne.

US President Donald Trump on Thursday predicted a swift end to the trade war with China, although no high-level talks are scheduled.

Market voices on:

China on Friday accused US officials of lying to the public about the trade war.

Pork imports by China are expected to surge as the country's hog herd has been decimated by the deadly African swine fever. China has bought some US pork, but the total volume so far has been disappointing.

Domestic demand, meanwhile, has been dented by rainy weather that has limited sales of meat for outdoor grilling. Memorial Day is normally viewed as the start of the summer grilling season.

The cash pork carcass cutout value was 65 US cents higher on Friday at US$83.27 per cwt, but that was down US$2.00 from a week ago, according to US Department of Agriculture (USDA) data.

Cash hog prices are also under pressure from ample supplies and limited demand from packers buying for a holiday-shortened slaughter week next week.

CME June lean hogs closed at 86.425 US cents per pound while actively traded July hogs ended at 87.950 US cents, both down the 3-cent limit.

Lean hogs will trade with expanded 4.5-cent limits on Tuesday, the CME said.

Live cattle futures were mostly lower on Friday as traders squared positions ahead of a monthly USDA cattle-on-feed report that was released after the close.

The report showed all on-feed supplies on May 1 up 2.2 per cent from a year earlier, compared with the average trade estimate for a 2.9 per cent. April cattle marketings rise 6.9 per cent, slightly above expectations, and cattle placements were up 8.7 per cent, well below forecasts for a 13 per cent increase.

June live cattle rose 0.375 US cent to 111.175 US cents per pound, while actively traded August fell 0.200 US cent to 107.950 US cents.

August feeder cattle finished up 0.200 US cent at 143.225 US cents per pound and September feeders fell 0.125 to 143.875 US cents.