Chicago | Reuters – U.S. lean hog futures closed mostly higher on Thursday on renewed hopes for accelerated U.S. pork sales to China after officials from both countries said an interim trade deal could include a phased rollback of tariffs.
The hog market has been highly sensitive to any signs of easing trade tensions between the United States and top pork consumer China, which has ramped up duties on U.S. shipments during a months-long trade war to as much as 72 percent.
But pork sales prospects remain promising as African swine fever has decimated China’s domestic herd and sent pork prices to record highs.
China and the United States have agreed to roll back tariffs on each others’ goods as part of the first phase of a trade deal, officials from both sides said. But the plan faces some opposition in the White House and more work is needed before the pact would be finalized.
“The hogs have been trading every tweet, every news clip,” said Jeff French, analyst with Top Third Ag Marketing in Chicago. “The rollback of tariffs on each other’s products during the signing of phase one, that’s a little bit favorable.”
Weekly export data, released by the U.S. Department of Agriculture on Thursday, showed moderate pork sales but strong shipments, particularly to China.
The USDA reported pork sales of 16,642 tonnes for shipment this year in the week ended Oct. 31, down 45% from a week earlier, while sales for shipment next year totaled a modest 8,340 tonnes.
Last week’s shipments of 10,633 tonnes to China were the second largest this year, USDA data showed.
Chicago Mercantile Exchange (CME) December lean hogs, the only contract that traded lower on the day, fell 0.475 cent to 64.300 cents per pound. February futures jumped a penny to 73.775 cents per pound.
December futures were dragged down by selling as commodity funds rolled long positions to the February contract. Thursday was the first day of the five-session-long rolling period.
CME live cattle futures finished mostly higher, supported by strong cash cattle prices and profitable beef packer margins.
CME December live cattle ended unchanged at 119.000 cents per pound, capped by fund rolling, while February futures gained 0.150 cent to 124.850 cents.
January feeder cattle ended up 1.350 cents at 145.775 cents per pound.