CHICAGO, Nov 5 (Reuters) - U.S. lean hog futures rallied on Tuesday in a technical-buying and short-covering bounce from recent lows, underpinned by hopes for accelerated pork sales to China amid surging prices in the world’s largest pork-consuming country, analysts said.
Pork prices have surged to record highs in China as African swine fever has decimated its domestic herd, although U.S. exports since the outbreak began more than a year ago have largely been short of market expectations.
Hog traders are awaiting any updates from U.S.-China trade negotiations and a deal is expected to include promises to buy large volumes of U.S. farm goods, including pork.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a “Phase One” deal, people familiar with the negotiations said on Monday.
Chicago Mercantile Exchange (CME) December lean hog futures jumped by as much as the daily 3-cent trading limit and settled 2.750 cents higher at 67.275 cents per pound, the highest in two weeks. February futures gained 1.850 cents to end at 73.750 cents per pound.
“We’ve had an oversold market. Hogs were due for a bounce,” said Matthew Wiegand, a broker with FuturesOne. “At this point the market is taking a wait-and-see approach to any trade news.”
The market shrugged off news that China would resume imports of pork and beef from rival supplier Canada after an escalating diplomatic feud halted shipments for about four months.
Live cattle futures ended mixed on Tuesday after soaring to six-month highs on Monday on firm cash cattle and beef prices. Some traders are anticipating a pullback from the highs after a steady climb since early September that took futures up more than 20%.
CME December live cattle settled down 0.625 cent at 119.450 cents per pound while February futures gained 0.075 cent to 124.675 cents per pound.
Feeder cattle ended mostly lower, with actively traded January futures down 0.225 cent at 145.775 cents per pound.
Reporting by Karl Plume; Editing by Dan Grebler
Our Standards: The Thomson Reuters Trust Principles.