Chicago | Reuters — U.S. hog futures rose 2.1 per cent on Tuesday on hopes for increased demand from China as the world’s top pork consumer announced plans to begin issuing tariff-free import licenses.
China will grant exemptions on retaliatory duties imposed against 696 U.S. goods, the most substantial tariff relief to be offered so far, as Beijing seeks to fulfill commitments made in its interim trade deal with the United States.
The move comes just days after the Phase One trade deal took effect on Feb. 14.
“This is the news we’ve waited for since the Phase One agreement was signed and will get product moving to China faster than the modest five per cent reduction in tariff rates announced two weeks ago,” INTL FCSTone said in a note to clients.
CME April lean hog futures rose 1.2 cents to settle at 65.5 cents/lb., its third straight day of gains (all figures US$).
About half of China’s hog herd has been decimated by the African swine fever epidemic and imports are expected to remain robust as the country looks to rebuild its domestic supplies.
Benchmark April live cattle futures on the Chicago Mercantile Exchange settled up 0.375 cent at 120.7 cents/lb. The contract hit resistance just below Friday’s high of 121.175 cents.
CME March feeder cattle futures gained 0.775 cent to close at 139.3 cents/lb.
The cattle markets also benefited from hopes for a pick-up in Chinese deals but concerns about the spread of coronavirus kept the gains in check, traders said.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.