Chicago | Reuters — U.S. lean hog futures rose on Friday on hopes that a “phase one” trade agreement announced by Washington and Beijing would stimulate Chinese purchases of U.S. pork, but prices pared gains as traders struggled with uncertainty about the specifics.
As part of the agreement, Beijing committed to buy an additional $32 billion in U.S. agricultural products over two years, or roughly $16 billion a year more than the 2017 baseline of $24 billion, U.S. Trade Representative Robert Lighthizer said (all figures US$).
Read Also

U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
He said Beijing would aim for another $5 billion in farm purchases each year on top of that.
Lighthizer said broad targets for Chinese purchases would be released publicly. There would also be specific targets for purchases of specific products, but those would not be made public to avoid distorting markets.
Chicago Mercantile Exchange (CME) February lean hog futures settled up 0.85 cent at 69.5 cents/lb., but that was about two cents below its session high of 71.55 cents as traders tried to parse news about the trade agreement.
“The consensus at this point is (that) the devil is in the details. What is actually on the paper? And nobody really knows. That’s what derailed the hogs,” said Dan Norcini, an independent livestock trader.
China is the world’s largest hog producer and pork consumer, but its domestic pork prices have soared as an outbreak of African swine fever has decimated the country’s hog herd. China stepped up purchases of U.S. pork this year but the trade war has acted as a brake.
Commodity funds, meanwhile, have built a net short position in CME lean hog futures in light of uncertain Chinese demand and plentiful U.S. supplies of hogs and pork.
“Until we see either the details in the agreement, or we see some concrete evidence that China is buying large quantities of U.S. pork, we can’t get the funds to run out of there,” Norcini said.
CME cattle futures posted bigger percentage gains than hogs, with the benchmark February live cattle contract settling up 2.45 cents at 127.55 cents/lb. after setting a contract high at 127.9 cents.
January feeder cattle futures rose 3.125 cents to close at 145.675 cents/lb.
“The one thing that is amazing to me is how rock-solid the cattle market was. The funds are in love with cattle,” Norcini said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.