Chicago | Reuters — Chicago Mercantile Exchange hog futures fell sharply on Friday, with the most active April contract hitting its lowest in more than five months, as disappointing export demand failed to ease the supply glut in the United States.
“The trade was very enthused that we were going to see all this Chinese business come into the marketplace and see exports go up,” said Don Roose, president of Iowa-based broker U.S. Commodities. “What we found so far is that has not been the case so the big number of hogs is just finally weighing on us.”
China’s imports of pork from the United States fell by more than half to about 263,000 tonnes in 2018, customs data showed on Friday, after Beijing imposed hefty tariffs on the meat as part of a trade war.
CME February lean hogs ended down 1.45 cents at 58.375 cents/lb. (all figures US$). Most-active April hog futures dropped 1.375 cents to 62.125 cents after bottoming out at 61.625 cents, its lowest since Aug. 15.
Cattle futures were mixed, with nearby live cattle contracts firming while feeders declined. Deferred live cattle contracts also finished in negative territory after rising on Thursday.
A bitter cold snap and snow across the U.S. Midwest was boosting feed costs for livestock producers as they tried to maintain animal weights, Roose added.
CME March feeder cattle was 0.7 cent lower at 143.625 cents/lb.
CME February live cattle finished 0.7 cent higher at 126.050 cents/lb. and most-active April cattle ended up 0.325 cent at 126.8 cents.
Analysts polled by Reuters had predicted that the number of cattle on feed in the United States on Jan. 1 was 102.2 per cent of the previous year’s total. The U.S. Agriculture Department’s monthly Cattle on Feed report, which was due on Friday, has been delayed indefinitely due to the partial U.S. government shutdown.
Analysts also predicted that cattle placements during December were 101.5 per cent of the December 2017 placements and marketings were equal to December 2017.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.