Chicago | Reuters — U.S. lean hog futures fell to a two-month low on Thursday on large supplies and uncertainty over negotiations to boost trade with China, the world’s top pork consumer.
Traders and meat producers are hoping for further U.S. pork sales to China, which is grappling with a fatal pig disease that has killed up to half its herd since August 2018. China is also the world’s largest hog producer.
Sales are being hampered by steep tariffs that Beijing imposed on imports of U.S. pork last year as part of the countries’ bruising trade war.
The Chinese commerce ministry said China and the U.S. are holding “in-depth” discussions on the first-phase of a trade agreement and that canceling tariffs is an important condition to reaching a deal.
U.S. farmers want to see increased export demand as the U.S. hog herd is bigger than ever. The U.S. Department of Agriculture (USDA) is due to issue weekly export sales data on Friday.
Chicago Mercantile Exchange (CME) December lean hogs reached their lowest price since Sept. 11 and ended 0.375 cent lower at 62.75 cents/lb. (all figures US$). February hogs slid 1.175 cents, to 73.375 cents/lb.
The wholesale pork cutout price was near unchanged from Wednesday at $87.04/cwt, up from $80.64 a week earlier, USDA data showed.
On Wednesday, USDA said the estimated average hog weight for the week ended Nov. 9 was 287.9 lbs., up from 286.7 a week earlier and 284 a year ago.
“Hopefully that is the peak in weights,” said Dennis Smith, commodity broker for Archer Financial Services.
In the cattle markets, futures bounced after sinking on Wednesday.
Prices appear to have set near-term highs after recently reaching six-month peaks, Smith said. Consumer demand for beef is easing, and export demand has not been stellar, he said.
“We think the beef is probably topping out for a minute,” Smith said.
February live cattle futures rose 0.825 cent, to 124.925 cents/lb. January feeder cattle advanced 1.225 cents, to 144.05 cents/lb., after touching their lowest price since Oct. 30 earlier in the session.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.