Hog futures rally on news of EU-China trade spat – CME

Lean hog futures rallied at the Chicago Mercantile Exchange (CME) on Monday, as news of a China-EU trade dispute gave contracts a psychological boost, even though it is unlikely to give US producers a new edge, according to traders and market analysts.

Cattle futures were mixed, with higher wholesale prices and expectations of tight cattle supplies this fall giving market support, traders said.

China has opened an anti-dumping investigation into imported pork and its by-products from the European Union, a step that appears mainly aimed at Spain, the Netherlands and Denmark, in response to curbs on its electric vehicle exports.

The investigation announced by China’s commerce ministry on Monday will focus on pork intended for human consumption, such as fresh, cold and frozen whole cuts, as well as pig intestines, bladders and stomachs. The probe will begin on June 17.

All of this comes as China continues to cull its sow herd, said Karl Setzer, partner at Consus Ag.

And US pork exports into China continue to face retaliatory duties of 25% in response to Section 232 steel and aluminum tariffs that were put into place in the US-China trade war during the Trump Administration.

“The simple fact is that a lot of traders have been looking for any sort of bottom in this hog market, and this served as one,” said Rich Nelson, chief strategist at Allendale Inc.

Meanwhile, wholesale prices for US pork eased. The US Department of Agriculture on Monday morning priced the pork carcass cutout at $98.38 per hundredweight (cwt), down $2.97 from Friday. Pork bellies, loin, butt and rib prices also were lower.

CME July hogs closed 1.725 cents higher at 95.375 cents per pound. Earlier in the session, the contract rose to 95.825 cents per pound, the highest since June 17.

CME August live cattle settled 0.375 cent lower at 182.800 cents per pound. CME August feeder cattle ended down 0.650 cents to end at 261.325 cents per pound.

Tags: lean hog, futures, trade dispute, China, exports, pork, EU, US, cattle