CHICAGO, July 29 (Reuters) - Chicago Mercantile Exchange (CME) livestock futures stumbled on Monday, with technical selling and profit-taking knocking the hog market to its lowest price levels in more than a week.
Traders said the market was ready for a setback after most-active October hogs climbed more than 20% from a four-month low on July 9 to a nearly two-month high on July 24.
“It’s definitely due for some sort of a healthy technical correction,” said Brian Hoops, president of U.S. broker Midwest Market Solutions.
August lean hog futures fell 2 cents to 84.425 cents per pound. October hogs sank by the daily, exchange-imposed 3-cent limit to 76.450 cents and reached their lowest price since July 19. CME will temporarily expand the limit to 4.5 cents on Tuesday.
Traders expect China, the world’s biggest hog producer, to increase purchases of U.S. pork to compensate for the loss of millions of pigs in an outbreak of the fatal African swine fever in China. But U.S. farmers and traders are still waiting for big sales to materialize.
“We continue to wait, wait and wait,” Hoops said. “We’ve been shipping some pork out, but we’d like to see fresh demand as well.”
China imposed retaliatory tariffs on imports of U.S. pork last year as part of the two nations’ ongoing trade war, hurting exports of American meat to the world’s biggest pork consumer.
Chinese and U.S. trade negotiators are set to meet for face-to-face trade talks in Shanghai this week for the first time since presidents Donald Trump and Xi Jinping met at the G20 summit in Osaka in June.
China’s tariffs put U.S. pork producers at a disadvantage to suppliers in other countries vying to fulfill China’s growing needs for meat during the African swine fever outbreak, according to American farmers.
China detected African swine fever, or ASF, in live pigs being transported to the northeastern Liaoning province, the official Xinhua News Agency said on Saturday, underlining the challenge facing Beijing in its bid to control the contagious disease.
“We want to pick up the real trade on ASF instead of just the crumbs,” said Jim Heimerl, an Ohio hog farmer and former president of the National Pork Producers Council.
CME August live cattle futures ended flat at 108.650 cents per pound. October live cattle slipped 0.450 cent to 109.450 cents per pound.
CME August feeder cattle futures dropped 1.425 cents to 142.300 cents per pound. September feeders lost 1.275 cents to 142.825 cents per pound. (Reporting by Tom Polansek in Chicago; Editing by Dan Grebler)