CHICAGO, Aug 16 (Reuters) - CME lean hog futures fell sharply on Friday, with the most-active October contract notching a limit down move as traders worried that seasonal growth in supplies will outstrip demand.
Weakness in the cash market also spilled over into the futures, traders said.
The demand concerns stemmed from uncertainty about potential purchases from China due to the ongoing trade fight with the United States.
The world’s top buyer of pork may look outside of the United States to meet its import needs, which were bigger than usual due to African Swine fever decimating its domestic herd.
“The big question mark is still the export demand and whether it will pick up a lot in the fourth quarter because of African Swine Fever,” said Doug Houghton, analyst with Brock Associates Inc.
China’s pig herd shrank by 32.2% in July from the same month a year ago, its agriculture ministry said on Thursday, as African swine fever continues to spread through the country.
Cattle futures also were lower, capping a week that saw the front-month live cattle contract sink 7.6% after a fire at a major Tyson Foods Inc plant in Kansas that threatened to cut the amount of cattle needed for slaughter for months.
The front month live cattle contract hit its lowest since October 2016 on Friday.
CME October hogs ended the day down 3 cents at 62 cents per pound. The contract will trade with an expanded 4.5 cent trading limit on Monday.
CME October live cattle ended 0.475 cent lower at 98.05 cents. CME September feeder cattle futures were 0.925 cent lower at 132.375 cents per pound. (Reporting by Mark Weinraub Editing by Tom Brown)