Chicago | Reuters — U.S. hog futures shot to their highest prices in more than six weeks on Monday on increased optimism over trade with China, the world’s biggest pork consumer.
China agreed to import more U.S. farm goods under a Phase 1 trade deal struck this month, providing support for farm markets. Chinese Vice-Premier Liu He will visit Washington this week to sign the agreement, the South China Morning Post reported.
“We’re positive on the China hopes once again,” said Arlan Suderman, chief commodities economist for U.S. broker INTL FCStone.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Most actively traded February lean hog futures advanced 1.225 cents to 71.8 cents/lb. at the Chicago Mercantile Exchange (all figures US$).
“I think we’re seeing some positive money flow momentum that’s helping support the market,” Suderman said.
Farmers are hoping China will further increase imports of U.S. pork to offset a shortage caused by the outbreak of a fatal pig disease. The disease, African swine fever, decimated China’s hog herd and pushed pork prices to record highs.
Beijing will release more frozen pork from its reserves ahead of the upcoming New Year and Lunar New Year holidays, state-owned CCTV reported, citing the ministry of commerce.
China will also increase its pork imports and diversify the import origins of the meat, said Wang Bin, deputy director of the market operation department under the ministry of commerce, according to CCTV.
The U.S. has been at a disadvantage to other suppliers, such as Europe, since last year because Beijing imposed retaliatory tariffs on imports of American pork as part of the countries’ trade war.
Separately, livestock traders were assessing a winter storm in the U.S. Plains that could disrupt weight gain in cattle and the transportation of farm animals to slaughterhouses. Snow increased across Nebraska, northern Kansas, eastern Colorado, the Dakotas, Minnesota, northern Wisconsin, and western Iowa this past weekend, according to weather firm Maxar.
Most actively traded February live cattle futures slipped 0.275 cent, to 126.425 cents/lb. at the CME. Other contracts were mixed. March feeder cattle futures dipped 0.3 cent, to 144.5 cents/lb.
Fed cattle traded in the southern Plains last week for $122/cwt in the cash market, up about $2 from the previous week, Suderman said.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
