Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures closed higher on Thursday on strong weekly U.S. pork export sales, traders said, including more than 77,000 tonnes sold to China as a fatal hog disease continued to spread in the Asian country.

CME live cattle futures followed hogs up but settled off their session highs.

Lean hog futures surged at the open, with the benchmark June contract soaring the daily three-cent limit after the U.S. Department of Agriculture reported export sales of U.S. pork in the week to April 4 at 90,700 tonnes, including 77,700 tonnes to China.

“That was the big story. It’s a really big event,” Dennis Smith, a broker with Archer Financial Services, said of the U.S. pork sales.

However, the market cooled as traders booked profits and worried about tariffs still in place as the U.S. and China work to resolve their trade war. Beijing imposed tariffs last year on imports of U.S. agricultural goods, including soybeans, grain sorghum and pork, as retribution for U.S. levies.

Most-active CME June lean hog futures settled up 1.25 cents on Thursday at 97.7 cents/lb., paring gains after reaching 99.45 cents, a one-week high (all figures US$).

“I attribute that to these nagging tariffs on U.S. pork that remain in place,” Smith said. “They (Chinese buyers) can buy all they want, but when are they going to start shipping massive amounts that will really tighten up the pork? They are unlikely to start doing that until these tariffs go away,” Smith said.

CME live cattle futures closed higher on spillover strength from lean hogs as well as worries about the impact of a blizzard raging in parts of the U.S. Plains and Midwest this week.

Benchmark CME June live cattle futures rose 0.475 cent to close at 120.425 cents/lb., after reaching 122.25 cents, and front-month April settled up 0.125 cent at 126 cents.

April feeder cattle futures settled up 0.25 cent at 145.425 cents/lb. and May feeders rose 0.625 cent at 149.85 cents.

Traders continued to monitor storms crossing South Dakota, Nebraska, Iowa and Minnesota.

“A major winter storm in April is really tough on cattle, and this storm is catching a lot of cattle and a lot of cow-calf guys with baby calves on the ground. It’s not good,” Smith said, adding that cattle weights are expected to decline due to poor weather in U.S. feedlots.

Additional strength in cattle futures stemmed from a seasonal uptick in beef demand, which has begun later than usual due to a late Easter and poor spring weather. Positive U.S. economic indicators, including low unemployment, should lend support, Smith said.

“When people are working and feeling good, beef and steaks and burgers on the grill are hot-selling items,” Smith said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.