CHICAGO, May 24 (Reuters) - Chicago Mercantile Exchange (CME) lean hog futures fell sharply on Friday on weak pork prices and concerns about export demand as trade tensions have increased between the United States and China, the world’s largest hog and pork market.
Traders squared positions ahead of the long Memorial Day holiday weekend due to the uncertain political climate. Futures markets will be closed on Monday.
“Going into the long weekend with the recent political environment there was concern that we could get a surprise,” said Matthew Wiegand, broker with FuturesOne.
U.S. President Donald Trump on Thursday predicted a swift end to the trade war with China, although no high-level talks are scheduled.
China on Friday accused U.S. officials of lying to the public about the trade war.
Pork imports by China are expected to surge as the country’s hog herd has been decimated by the deadly African swine fever. China has bought some U.S. pork, but the total volume so far has been disappointing.
Domestic demand, meanwhile, has been dented by rainy weather that has limited sales of meat for outdoor grilling. Memorial Day is normally viewed as the start of the summer grilling season.
The cash pork carcass cutout value was 65 cents higher on Friday at $83.27 per cwt, but that was down $2.00 from a week ago, according to U.S. Department of Agriculture (USDA) data.
Cash hog prices are also under pressure from ample supplies and limited demand from packers buying for a holiday-shortened slaughter week next week.
CME June lean hogs closed at 86.425 cents per pound while actively traded July hogs ended at 87.950 cents, both down the 3-cent limit.
Lean hogs will trade with expanded 4.5-cent limits on Tuesday, the CME said.
Live cattle futures were mostly lower on Friday as traders squared positions ahead of a monthly USDA cattle-on-feed report that was released after the close.
The report showed all on-feed supplies on May 1 up 2.2% from a year earlier, compared with the average trade estimate for a 2.9%. April cattle marketings rise 6.9%, slightly above expectations, and cattle placements were up 8.7%, well below forecasts for a 13% increase.
June live cattle rose 0.375 cent to 111.175 cents per pound, while actively traded August fell 0.200 cent to 107.950 cents.
August feeder cattle finished up 0.200 cent at 143.225 cents per pound and September feeders fell 0.125 to 143.875 cents.
Reporting by Karl Plume in Chicago Editing by Sonya Hepinstall