Chicago | Reuters — U.S. lean hog futures retreated on Monday, with actively traded nearby contracts sinking more than three per cent and hitting life-of-contract lows amid worries about pork exports to China, which has stepped up oversight of imported goods due to COVID-19.
China’s customs authority said on Sunday it had suspended poultry imports from a Tyson plant in Arkansas due to a cluster of coronavirus cases at the facility. That followed the halt of pork imports from a German processor last week.
China’s customs authority has also asked suppliers of imported food to sign a declaration their produce is not contaminated by the novel coronavirus.
Numerous U.S. pork plants have been shuttered during the pandemic, but exports to China have continued to flow.
“Not importing from Tyson right now is definitely why we had some pressure in the hogs today,” said Ted Seifried, chief ag market strategist at Zaner Ag Hedge.
Chicago Mercantile Exchange (CME) July lean hogs fell 1.625 cents to 46.825 cents/lb., while actively traded August fell 1.7 cents to 51.1 cents/lb. (all figures US$). Both contracts posted fresh contract lows during the session.
After the close, the U.S. Department of Agriculture (USDA) reported a record-large drop in U.S. frozen pork inventories last month, which analysts said was due to coronavirus-related pork plant closures and soaring pork prices.
CME live cattle futures closed lower after USDA, in a monthly Cattle on Feed report late on Friday, pegged on-feed supplies and placements above trade expectations and marketings below estimates.
The data showed that the sector has not yet addressed a cattle backlog caused by shutdowns of beef plants due to the pandemic.
August live cattle settled down 0.275 cent at 95.125 cents/lb.
Feeder cattle futures followed live cattle down, with August feeders down 0.8 cent at 131.75 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.