CHICAGO, May 7 (Reuters) - U.S. lean hog futures touched their lowest prices in about two months on Tuesday on concerns over elevated trade tensions between Washington and Beijing.
Traders are worried that a resolution to the U.S.-China trade war may be farther off than previously expected, after U.S. President Donald Trump’s surprise statement on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.
U.S. pork producers want an end to the dispute because China’s purchases of American pork have slowed since Beijing raised duties on imports from the United States to 62 percent last year.
Still, China will need to increase total pork imports to compensate for hogs killed in an outbreak of African swine fever, analysts said. The disease, which is fatal for hogs but does not affect humans, is expected to wipe out tens of millions of pigs in China, the world’s top hog producer.
China’s increased demand should generally underpin hog futures going forward, analysts said.
“African swine fever is expected to dramatically tighten global meat supplies, regardless of whether we have a trade deal or not,” said Arlan Suderman, chief commodities economist for INTL FCSTone.
June lean hogs ended down 0.500 cents at 89.250 cents per pound at the Chicago Mercantile Exchange (CME), after dropping by the 3-cent daily trading limit on Monday.
July lean hog futures closed down 0.550 cent at 92.125 cents, after also falling by the daily limit on Monday.
CME will reinstate the 3-cent limit for trading on Wednesday after temporarily expanding it to 4.5 cents on Tuesday.
Live cattle futures traded mostly higher, with traders saying the market was technically oversold.
June live cattle ended flat at 112.275 cents per pound. August cattle rose 0.675 cent to 109.075 cents per pound.
August feeder cattle advanced 1.250 cents to 145.600 cents per pound, while September was up 0.925 cent at 146.475 cents. (Reporting by Tom Polansek in Chicago Editing by Bill Berkrot)