CHICAGO, Aug 29 (Reuters) - U.S lean hog futures shot to their highest prices in more than a week on Thursday on hopes for progress in trade negotiations with China.
China’s commerce ministry said both sides are discussing the next round of talks scheduled in September, but progress would be determined by whether Washington could create favorable conditions.
U.S. President Donald Trump said in a Fox News radio interview that trade talks were scheduled for Thursday “at a different level,” but did not provide additional details.
The comments raised hopes among some livestock traders because they expect China would significantly increase pork imports if a deal is reached to resolve the trade war between Washington and Beijing.
China imposed retaliatory tariffs on imports of U.S. pork and other farm products last year and said on Aug. 5 that Chinese companies stopped buying U.S. farm products.
“All you need is just some sort of a constructive dialogue to just open the door to more pork sales to that market,” said Altin Kalo, agricultural economist for New Hampshire-based Steiner Consulting.
Chicago Mercantile Exchange (CME) October lean hogs jumped 1.40 cents to 64.900 cents per pound and reached their highest price since Aug. 21.
China needs to increase meat imports because it is struggling with a hog disease called African swine fever that has killed millions of pigs and pushed Chinese pork prices to record highs, according to analysts.
China’s commerce ministry said it will seek to boost pork imports and also release frozen meat from state reserves to increase supplies.
China made a small purchase of American pork last week, U.S. Department of Agriculture data showed, before an additional 10% tariff on farm imports kicks in on Sept. 1.
Total U.S. pork export sales for 2019 were 28,400 tonnes last week, up 53% from the previous and 85% from the prior four-week average, according to USDA data. Japan and Mexico were major buyers.
Export sales of U.S. beef, meanwhile, were 13,700 tonnes, down 20% from the previous week and 18% from the prior four-week average, according to USDA.
Cattle futures still ended higher on positioning ahead of the end of the month and three-day Labor Day weekend, traders said.
“Some of it is just money flow,” Kalo said.
CME October live cattle futures settled 0.600 cent firmer at 99.800 cents per pound. October feeder cattle rose 0.350 cent to 131.975 cents per pound.
Reporting by Tom Polansek in Chicago Editing by Marguerita Choy