CHICAGO, Sept 10 (Reuters) - Chicago Mercantile Exchange lean hog futures jumped on Tuesday as expectations rose for China to increase pork imports from the United States, traders said.
China, the world’s top pork consumer, is expected to buy more American agricultural products in hopes of a better trade deal with Washington, the South China Morning Post reported, citing a source.
A senior White House adviser tamped down expectations for the next round of U.S.-China trade talks. But Chinese purchases of U.S. pork would be welcome by American farmers and exporters as the countries’ trade war has impeded U.S. meat exports for more than a year.
“That is the only story for the hogs today,” said Rich Nelson, chief strategist for Illinois-based broker Allendale.
CME October lean hogs closed 0.125 cent higher at 62.725 cents per pound, after dropping to a one-year low last week. December hogs advanced 1.825 cents to 61.775 cents.
China is widely expected to need more imported meat as it struggles with a fatal pig disease called African swine fever. China has seen its hog herd, the world’s largest, shrink by a third since the disease arrived in the country more than a year ago. Beijing on Tuesday reported a new case in the northwestern region of Ningxia.
“China will have to come back to the U.S. pork market regardless of the trade talks by the fourth quarter,” Nelson said.
Cattle futures also traded higher, with CME October live cattle futures ending up 1.950 cents at 96.150 cents per pound. The market rebounded after October live cattle on Monday set a contract low and hit a nine-year low on a continuous chart of front-month cattle futures.
December live cattle climbed 2.050 cents to 101.225 cents per pound.
Technical buying helped support gains in livestock futures, traders said.
Tuesday was also the second day of the five-session roll in which funds tracking Standard & Poor’s Goldman Sachs Commodity Index sell the nearby contract and buy the next contract month, according to traders.
Weak cash cattle prices continued to hang over the futures. Cash cattle traded lightly at $96 per cwt in Texas on Monday, down from $100 last week, Nelson said.
Cattle futures and cash prices have been under pressure since a fire at a Tyson Foods slaughterhouse in Holcomb, Kansas, last month removed a key buyer from the market.
CME October feeder cattle closed 1.225 cents higher at 131.050 cents per pound. (Reporting by Tom Polansek in Chicago; Editing by David Gregorio)