Lean hog futures plummet amid US-China trade tensions
On Tuesday 6 August, the Chicago Mercantile Exchange (CME) lean hog futures tumbled as the US-China trade war intensified.
According to reporting from Reuters, lean hog futures fell sharply due to worries about US pork exports and the growing trade tensions between Washington and Beijing.
China has threatened to stop all purchases of US agricultural products after President Trump announced a 10 percent tariff on a further $300 billion of Chinese imports from 1 September.
China was expected to increase pork imports this year, including from the United States, since African swine fever has reduced a large portion of China’s pig herd.
“We built premiums up in the deferred (futures contract) months on expected Chinese demand, and now that’s been taken away. Now we’re looking at really big hog supplies,” said Doug Houghton, analyst with Brock Associates Inc.
“Without China it’s going to be difficult to reach those (export) numbers so we just have more pork going into the domestic market,” Houghton said.
CME August lean hog futures settled 0.725 cent lower at 77.125 cents per pound. Most-active October hogs, which touched an 11-1/2 month low on Monday, ended the day down 2.825 cents at 64.600 cents per pound, the contract's sixth decline in seven sessions.
Cash hog prices in the closely followed Iowa and southern Minnesota market traded 61 cents per cwt lower on Tuesday, with the average price down nearly $9 per cwt from a week ago amid ample supplies of animals.
Read the original story here.
