CHICAGO, Nov 14 (Reuters) - U.S. lean hog futures fell to a two-month low on Thursday on large supplies and uncertainty over negotiations to boost trade with China, the world’s top pork consumer.
Traders and meat producers are hoping for further U.S. pork sales to China, which is grappling with a fatal pig disease that has killed up to half its herd since August 2018. China is also the world’s largest hog producer.
Sales are being hampered by steep tariffs that Beijing imposed on imports of U.S. pork last year as part of the countries’ bruising trade war.
The Chinese commerce ministry said China and the United States are holding “in-depth” discussions on the first-phase of a trade agreement and that canceling tariffs is an important condition to reaching a deal.
American farmers want to see increased export demand as the U.S. hog herd is bigger than ever. The U.S. Department of Agriculture (USDA) is due to issue weekly export sales data on Friday.
Chicago Mercantile Exchange (CME) December lean hogs reached their lowest price since Sept. 11 and ended 0.375 cent lower at 62.750 cents per pound. February hogs slid 1.175 cents to 73.375 cents per pound.
The wholesale pork cutout price was near unchanged from Wednesday at $87.04 per cwt, up from $80.64 a week earlier, USDA data showed.
On Wednesday, the USDA said the estimated average hog weight for the week ended Nov. 9 was 287.9 pounds, up from 286.7 pounds a week earlier and 284 pounds a year ago.
“Hopefully that is the peak in weights,” said Dennis Smith, commodity broker for Archer Financial Services.
In the cattle markets, futures bounced after sinking on Wednesday.
Prices appear to have set near-term highs after recently reaching six-month peaks, Smith said. Consumer demand for beef is easing, and export demand has not been stellar, he said.
“We think the beef is probably topping out for a minute,” Smith said.
February live cattle futures rose 0.825 cent to 124.925 cents per pound. January feeder cattle advanced 1.225 cents to 144.050 cents per pound, after touching their lowest price since Oct. 30 earlier in the session.
Reporting by Tom Polansek in Chicago; Editing by Dan Grebler