ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

US hog futures drop to lowest levels in over a week

CME livestock futures stumbled on Monday, with technical selling and profit-taking knocking the hog market to its lowest price levels in more than a week.

30 July 2019, at 10:22am

Traders said the market was ready for a setback after most-active October hogs climbed more than 20 percent from a four-month low on 9 July to a nearly two-month high on 24 July.

"It's definitely due for some sort of a healthy technical correction," said Brian Hoops, president of US broker Midwest Market Solutions.

August lean hog futures fell 2 cents to 84.425 cents per pound. October hogs sank by the daily, exchange-imposed 3-cent limit to 76.450 cents and reached their lowest price since 19 July. CME will temporarily expand the limit to 4.5 cents on Tuesday.

Traders expect China, the world's biggest hog producer, to increase purchases of US pork to compensate for the loss of millions of pigs in an outbreak of the fatal African swine fever in China. But US farmers and traders are still waiting for big sales to materialise.

"We continue to wait, wait and wait," Hoops said. "We've been shipping some pork out, but we'd like to see fresh demand as well."

China imposed retaliatory tariffs on imports of US pork last year as part of the two nations' ongoing trade war, hurting exports of American meat to the world's biggest pork consumer.

Chinese and US trade negotiators are set to meet for face-to-face trade talks in Shanghai this week for the first time since presidents Donald Trump and Xi Jinping met at the G20 summit in Osaka in June.

China's tariffs put US pork producers at a disadvantage to suppliers in other countries vying to fulfill China's growing needs for meat during the African swine fever outbreak, according to American farmers.

China detected African swine fever, or ASF, in live pigs being transported to the northeastern Liaoning province, the official Xinhua News Agency said on Saturday, underlining the challenge facing Beijing in its bid to control the contagious disease.

"We want to pick up the real trade on ASF instead of just the crumbs," said Jim Heimerl, an Ohio hog farmer and former president of the National Pork Producers Council.