June 23, 2020 / 10:12 PM / 20 days ago

LIVESTOCK-U.S. hog, cattle futures rise as frozen meat stocks decline

CHICAGO, June 23 (Reuters) - U.S. cattle and hog futures firmed on Tuesday following two sessions of declines after U.S. Department of Agriculture (USDA) data showed a larger-than-anticipated decline in cold-storage stocks of pork and beef.

The USDA stocks report, released after the close on Monday, showed a record-large drop in U.S. frozen pork inventories in May and a steep drop in frozen beef supplies.

Frozen inventories plunged last month as outbreaks of the new coronavirus among meatpacking workers slowed production and exporters drew from supplies in storage.

Chicago Mercantile Exchange (CME) July lean hogs gained 0.075 cent to 46.900 cents per pound, while actively traded August jumped 1.400 cents to 52.500 cents per pound.

CME August live cattle rose 2.075 cents to 97.200 cents per pound and August feeder cattle jumped 1.450 cents to $133.200 cents per pound.

“This is certainly a cold storage report reaction. Pork numbers were a record for any previous month and the beef numbers were the second largest decline of any previous month,” said Rich Nelson, chief strategist with Allendale Inc.

Ample supplies of livestock following coronavirus-related supply-chain disruptions continue to hang over the market.

Hog traders are looking ahead to a quarterly USDA report on Thursday that is expected to show a 3.7% expansion of the U.S. hog herd in the March-to-May quarter.

Traders are also monitoring U.S. trade with China after White House trade adviser Peter Navarro on Monday walked back on his earlier remarks that the U.S.-China trade pact was “over,” stoking volatility in markets already rattled by the coronavirus pandemic.

Markets are also wary about requests by Chinese authorities to certify food import shipments to be free of coronavirus contamination. Although there is no evidence that the virus can be transmitted from food to people, at least three Brazilian meat processors have signed such declarations.

Reporting by Karl Plume; Editing by Lisa Shumaker

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