Chicago | Reuters — Chicago Mercantile Exchange lean hog futures charged higher on Wednesday, with the May contract surging 5.4 per cent, on hopes for a trade deal with China that would boost exports to the world’s largest consumer of pork.
“U.S.-China trade talks restart in D.C. today and most accounts have those negotiations going relatively well, with one source indicating the deal is 90 per cent done,” INTL FCStone said in a note to clients.
White House economic adviser Larry Kudlow said on Wednesday that talks are progressing and both sides hope to get closer to a deal this week as negotiators prepared to start a fresh round of talks in Washington.
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The expiring CME April lean hogs contract ended up 0.125 cents at 79.075 cents/lb. (all figures US$). May hogs were 4.4 cents higher at 88.4 cents and June hogs rose 3.35 cents to close at 94.85 cents.
Both the May and June contracts had expanded trading limits on Wednesday after closing up the three-cent daily limit on Tuesday.
Concerns about African swine fever further boosting China’s demand for pork imports also supported the hog market. China’s agriculture ministry said on Wednesday it will require pork processors handling raw pork to test for the presence of the virus starting May 1.
Brazilian food processor BRF said on Wednesday that Brazil will step up pork exports to China where the swine fever outbreak is a “transformational event” for the global meat industry.
Cattle futures dropped on pressure from a weak cash market. The front-month live cattle contract hit its lowest since Feb. 14.
April live cattle futures were 0.5 cent lower at 125.775 cents/lb. while the actively traded June contract dropped 0.65 cent to 119 cents.
April feeder cattle futures were off 0.1 cent at 144.75 cents/lb. while May feeders were down 0.525 cent at 147.275.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.
