U.S. livestock: Hogs extend declines on demand worries

Chicago | Reuters — U.S. lean hog futures fell over three per cent on Monday, weighed down by plentiful supplies and worries of weaker demand later this year due to tariffs on imports of American pork in Mexico and Canada, traders and analysts said.

Most-active Chicago Mercantile Exchange August hogs sank 2.65 cents to 72.775 cents/lb., the lowest since reaching a life-of-contract low on April 4. The October, December and February contracts each notched lifetime lows.

China last week imposed tariffs on U.S. pork and billions of dollars worth of other goods. The move followed tariffs installed by Mexico, the top buyer of U.S. pork, on some cuts of the meat earlier this year.

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Hog futures have largely drifted lower since a government report at the end of June that showed an expanded U.S. herd.

“Hogs just by themselves are supply bearish. Then you take the external factors that are the tariffs, and that’s not a positive,” said U.S. Commodities president Don Roose.

Hog futures have declined even as cash prices have increased last week. Cash hog prices often gain in the summer months, when hot weather slows weight gain in the animals, reducing supply, at the same time some U.S. consumers cook more meat outdoors on grills.

Hogs in the top cash market of Iowa and southern Minnesota on Monday were down 50 cents, to $76.85/cwt, according to the U.S. Department of Agriculture.

Cattle futures also eased, with prices for both live and feeder cattle extending declines on technical selling and worries of abundant U.S. cattle supplies.

CME August live cattle fell 0.25 cent to 106.125 cents/lb., declining for the fifth straight session and finding downside support at its 100-day moving average.

CME August feeder cattle finished 0.75 cent lower at 151.45 cents/lb., the third straight daily decline.

Feeder steers and heifers were up $1-$4/cwt higher at a closely watched cattle auction in Oklahoma City, where demand was “good to very good,” according to USDA.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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