Chicago | Reuters – Chicago Mercantile Exchange (CME) hog futures extended losses on Tuesday, with U.S.-China trade concerns helping to push prices to their lowest levels in about two weeks.
China imposed retaliatory tariffs on imports of U.S. pork and other farm products last year as part of the two nations’ ongoing dispute, hurting exports of American meat to the world’s biggest pork consumer.
U.S. President Donald Trump on Tuesday warned China against waiting out his first term to finalize any trade deal, saying if he wins re-election in the November 2020 U.S. presidential contest, the outcome could be no agreement or a worse one.
“The declines were the result of trade relations and how tensions between the U.S. and China have escalated,” said Karl Setzer, commodity market risk analyst for AgriVisor.
August lean hog futures fell 2.125 cents to 82.300 cents per pound. October hogs sank 2.450 cents to 74.000 cents per pound and reached their lowest price since July 15.
Traders said the market was due for a technical pullback after the most-active October hogs contract climbed more than 20 percent from a four-month low on July 9 to a nearly two-month high last week.
Analysts expect China, the world’s biggest hog producer, to increase purchases of U.S. pork to compensate for the loss of millions of pigs in an outbreak of the fatal African swine fever in China. However, they are still waiting for big new sales.
African swine fever has also spread to other countries in Asia and Europe. Bulgarian veterinary authorities said they would cull 17,000 pigs after detecting an outbreak at a breeding farm, the fourth industrial farm hit by the fast-spreading virus.
In the cattle market, futures came under pressure from weak cash prices, traders said.
“People have been a little disappointed by the cash cattle trade the last couple weeks,” said Rich Nelson, chief strategist for broker Allendale.
CME August live cattle futures ended 0.550 cent lower at 108.100 cents per pound. October live cattle slipped 0.375 cent to 109.075 cents per pound.
CME feeder cattle futures rose as grain prices declined, making livestock feed less expensive.
August feeders ended up 0.800 cent at 143.100 cents per pound. September feeders gained 1.225 cents to 144.050 cents per pound.