June 19, 2018 / 10:19 PM / 5 months ago

LIVESTOCK-Hog futures fall on trade war fears, weaker cash prices

    By Michael Hirtzer
    CHICAGO, June 19 (Reuters) - Chicago Mercantile Exchange
lean hog futures         fell over 2 percent on Tuesday, giving
back gains notched in the previous session on broad selling
across commodities amid fears of trade wars with importers of
U.S. products including China and Mexico.
    A decline in U.S. cash hog prices late on Monday also
weighed on the futures market when trade resumed on Tuesday. 
    Traders were bracing for retaliation from China after U.S.
President Donald Trump threatened more tariffs on $200 billion
of Chinese goods. China has already slowed its imports of U.S.
pork and other goods including soybeans while Mexico, the top
buyer of U.S. pork, earlier this month said it imposed tariffs
on some pork cuts.                          
    "The whole trade issue is a disaster," Archer Financial
Services analyst Dennis Smith said.
    U.S. pork packers expanded operations in recent years, in
part to cater to new international demand from China and
elsewhere. Now they were facing potentially reduced exports that
could leave larger domestic stockpiles of hogs and pork.
    CME July hogs        settled down 1.850 cents at 81.875
cents per pound and most-active August hogs        off 1.700
cents to 77.725 cents.
    The U.S. Department of Agriculture after the futures market
closed said cash hogs in the biggest market of Iowa and southern
Minnesota were 67 cents higher at $83.50 per cwt. Prices on
Monday had dropped by 70 cents to $82.83, prompting futures
selling.         
    Live         and feeder cattle         futures rebounded
from earlier declines to turn higher, lifted by technical buying
and positioning ahead of USDA's monthly Cattle on Feed report
due on Friday.
    Analysts polled by Reuters expected the USDA to show 11.470
million cattle were on feed as of June 1, or 103.4 percent of a
year ago. Cattle placements in May were forecast at 95.6 percent
of a year ago, or 2.026 million cattle.              
    A drop in placements could suggest slightly fewer cattle
available to beef packers later this year. 
    Most-active CME August live cattle        were up 1.250
cents to 106.425 cents per pound and August feeder cattle       
up 0.650 cent to 149.625 cents.
    

 (Reporting by Michael Hirtzer; editing by Diane Craft)
  
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