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Karl Plume

LIVESTOCK-CME lean hogs rebound, market eyes U.S.-China trade talks

07 Dec 2018

By Karl Plume CHICAGO, Dec 7 U.S. lean hog futures closed out the week on a positive note on Friday as hopes for a pickup in pork sales to China fueled speculative buying that lifted prices more than 1 percent and reversed the prior session's losses. The market remains focused on trade talks between the United States and China after a 90-day trade war truce was reached last weekend. That deal, according to the White House, included promises by Beijing to "immediately" purchase U.S. agricultural products, a list that is expected to include pork. U.S. President Donald Trump wrote in a tweet on Friday morning that "China talks are going very well." China, the world's largest hog and pork market, has lost large numbers of its domestic hog herd due to the highly contagious African swine fever that has been found on more than 70 farms across the country. Chicago Mercantile Exchange February lean hogs settled up 0.975 cent at 67.875 cents per pound and April hogs added 1.050 cent to 72.325 cents. Rising cash hog prices late this week and strong packer margins also supported futures. Cash hogs in the closely watched Iowa and southern Minnesota market were 80 cents per cwt higher on Friday and up $1.28 over the past two days, according to U.S. Department of Agriculture data. The average packer margin on Friday swelled to $41.75 per head, up from $30.85 a week earlier, according to livestock marketing and advisory service HedgersEdge. Live cattle futures closed mixed on Friday as the market awaited cash cattle trading at U.S. Plains feedlot auctions. Cattle sellers were holding out for prices higher than last week's $117 to $118 per cwt sales, although packer bids on Friday afternoon remained around $116 against offers of $119 to $120, traders said. Headwinds from concerns about a slowing economy possibly blunting beef demand anchored live cattle prices in general. Wall Street's main indexes fell sharply on Friday and posted their largest weekly percentage drops since March. CME February live cattle futures settled down 0.275 cent at 121.525 cents per pound while April cattle rose 0.150 cent to 123.625 cents. Feeder cattle futures were also mixed, with gains capped by rising corn feed prices, which rose by about 2 percent this week. January feeder cattle settled up 0.175 cent at 144.375 cents while March feeders ended down 0.075 cent at 141.875 cents. (Reporting by Karl Plume Editing by Tom Brown)

LIVESTOCK-CME lean hogs drop on U.S.-China trade worry after Huawei arrest

06 Dec 2018

By Karl Plume CHICAGO, Dec 6 U.S. lean hog futures fell for the third time in four sessions on Thursday on worries about rising U.S.-China trade tensions following the arrest of a Chinese executive in Canada, but the market clawed back most of the losses by the close. After optimism that trade talks last weekend between Washington and Beijing could lead to a trade deal, the arrest of a senior executive from China's Huawei Technologies Co Ltd again stoked concerns that progress in trade talks could be derailed. The White House has said the trade detente included an agreement by China to immediately buy U.S. agricultural products, among which would likely be pork. Chicago Mercantile Exchange February lean hogs settled down 0.850 cent at 66.900 cents per pound after earlier sinking as low as 65.250 cents. April hogs shed 0.850 cent to 71.275 cents. "The market bent on the concerns that there was a new issue that popped up, but it didn't break," said Don Roose, president of U.S. Commodities. "The market came back from the lows so there is still that optimism that an agreement is in the works." Traders will be monitoring U.S. Department of Agriculture weekly export sales data on Friday morning for signs of continued pork purchases by China after the world's top hog and pork market made unexpected purchases a week earlier. Live cattle futures slid lower in a profit-taking setback after two days of gains fueled by a firm tone to the cash market and worries about harsh weather in the Plains feedlot areas. Active cash market trading has yet to develop this week, although prices are expected to be at least steady with last week's sales at $117 to $118 per cwt. CME February live cattle futures settled down 0.575 cent at 121.800 cents per pound, holding chart support at its 50-day moving average. Feeder cattle futures followed live cattle lower. January futures settled down 1.275 cents at 144.200 cents. (Reporting by Karl Plume, Editing by Rosalba O'Brien)

GRAINS-Soybeans slip as Huawei arrest dampens U.S.-China trade hopes

06 Dec 2018

* Wheat stays weak on demand concerns, corn edges down (Recasts with U.S. market open, adds analyst comment, updates prices, changes dateline from PARIS/SINGAPORE)

LIVESTOCK-CME lean hogs rebound on demand hopes, good pork margins

05 Dec 2018

By Karl Plume CHICAGO, Dec 5 U.S. lean hog futures rebounded on Wednesday after two sessions of declines as improving meat packer margins and hopes for more pork sales to China buoyed the market. Traders are anticipating more pork sales to China following surprise sales to the world's largest hog and pork market last week. Washington and Beijing also struck a trade war truce deal last weekend that the White House said would feature immediate purchases of U.S. agricultural product, which traders said could include U.S. pork. China has been battling a severe outbreak of African swine fever that has killed hundreds of hogs. Three more cases were announced on Wednesday. China expressed confidence on Wednesday that it can reach a trade deal with the United States, but new sales of pork or other agricultural commodities are yet to be confirmed by either country. "Right now there's just a lot of uncertainty on the China front and that's part of the reason we're chopping around. Overall, the strong packer margins and the expected seasonal decrease in the hog supplies are positives," said Doug Houghton, analyst with Brock Associates Inc. Chicago Mercantile Exchange February lean hogs settled up 1.700 cents at 67.750 cents per pound, recovering all of the declines from the previous two sessions. April hogs gained 1.375 cents to 72.125 cents. Average pork packer margins on Wednesday expanded to $38.05 per head, up from $29.80 a week ago, according to HedgersEdge.com. Live cattle futures also advanced on technical buying and on expectations for firm cash cattle prices at U.S. Plains feedlot markets this week. Active trading has yet to develop this week at Plains fed cattle markets, but prices are expected to be at least steady with last week' sales at $117 to $118 per cwt. Harsh winter weather in the Plains has also raised some concerns about reduced weight gain rates and difficulty moving cattle. CME February live cattle futures settled up 0.725 cents at 122.375 cents per pound, holding chart support at its 50-day moving average. Feeder cattle futures tracked live cattle higher, with January futures up 1.075 cent at 145.475 cents. (Reporting by Karl Plume)

LIVESTOCK-CME lean hogs slip on U.S.-China trade truce worries

04 Dec 2018

By Karl Plume CHICAGO, Dec 4 U.S. lean hog futures fell for a second consecutive session on Tuesday on concern over a trade truce agreement reached over the weekend between the United States and China, the world's top hog and pork market. Global stock markets tumbled on Tuesday as optimism waned that the United States and China could quickly resolve their trade dispute. At a meeting between the world's top two economies on Saturday, the White House agreed to delay new tariffs during a 90-day truce period, while Beijing pledged to purchase more agricultural products from U.S. farmers immediately. U.S. pork and soybeans were expected to represent the bulk of that buying. "The hogs and the S&P are going down, taking risk premium out of the market because of disappointment in the overall U.S. China trade deal," said Mike Zuzolo, president of Global Commodity Analytics. U.S. President Donald Trump said he was open to extending the 90-day trade truce window but also warned he would revert to tariffs if the two sides could not resolve their differences. China is expected to need large pork imports as vast numbers of its domestic hogs have been culled due to the spread of African swine fever to farms across the country. But steep import duties imposed on U.S. pork during the tit-for-tat trade fight remain in place. Chicago Mercantile Exchange February lean hogs settled down 0.850 cent at 66.050 cents per pound while April fell 0.475 cent at 70.750 cents. Live cattle futures were higher, lifted by firm beef prices and expectations for at least steady cash cattle sales this week. Harsh U.S. Plains weather also underpinned the market as snow and frigid temperatures were seen slowing cattle growth and movement. CME February live cattle futures settled up 1.475 cents at 121.650 cents per pound. January feeder cattle futures ended down 0.100 cent at 144.400 cents. (Reporting by Karl Plume; Editing by Lisa Shumaker)

LIVESTOCK-CME lean hogs ease, awaiting US-China trade truce benefits

03 Dec 2018

By Karl Plume CHICAGO, Dec 3 U.S. lean hog futures closed mostly lower on Monday in a profit-taking setback from near two-highs as traders awaited further confirmation of pork purchases by China following a thaw in tense trade relations over the weekend. At a gathering of G20 countries in Argentina on Saturday, the White House agreed to delay new tariffs during a 90-day truce period, while Beijing pledged to purchase more agricultural products from U.S. farmers immediately. Hog futures bounded higher as trading opened for the week as investors speculated that pork would be among the primary products purchased and after surprise pork sales to China in weekly U.S. government export sales report last week. China has also seen vast numbers of its domestic hog herd culled due to African swine fever that has struck dozens of farms across the world's top hog and pork producing country. But buying enthusiasm faded as details of China's buying plan remained very limited and as Beijing has yet to lower its steep import tariffs on U.S. pork shipments. "We had an initial positive reaction this morning on the trade news. But in the absence of anything concrete, it was walked back a bit," said Matthew Wiegand, broker with FuturesOne. "Until we see some more follow through on the Chinese commitments, it's going to be a tough climb," he said. Chicago Mercantile Exchange February lean hogs settled down 0.650 cent at 66.900 cents per pound while April fell 0.750 cent at 71.225 cents. Live cattle futures ended lower on seasonally muted packer demand in the cash market and adequate supplies of fed cattle available. Harsh Plains weather limited declines as snow and frigid temperatures were seen slowing cattle growth and movement. Feeder cattle, meanwhile, slumped as higher corn futures prices suggested higher production costs. CME February live cattle futures settled down 0.325 cent at 120.175 cents per pound. January feeder cattle futures ended down 0.725 cent at 144.500 cents. (Reporting by Karl Plume; editing by Diane Craft)

RPT-INSIGHT-Spoils of trade war: Argentina loads up on cheap U.S. soybeans

30 Nov 2018

BUENOS AIRES/CHICAGO, Nov 30 A ship named the Torrent is nearing the end of a 5,000-mile trip carrying soybeans from the U.S. Great Lakes to Argentina - a journey that only makes economic sense because of the U.S.-China trade war.

Spoils of trade war: Argentina loads up on cheap U.S. soybeans

30 Nov 2018

BUENOS AIRES/CHICAGO A ship named the Torrent is nearing the end of a 5,000-mile trip carrying soybeans from the U.S. Great Lakes to Argentina - a journey that only makes economic sense because of the U.S.-China trade war.

LIVESTOCK-Lean hogs surge daily limit on African swine fever fears

16 Nov 2018

By Karl Plume CHICAGO, Nov 16 Chicago Mercantile Exchange lean hog futures surged on Friday and the three most active contracts closed up their daily trading limit on rising concerns about the spread of African swine fever in China, traders said. Technical buying accelerated gains, lifting several deferred-month contracts to life-of-contract highs. "African swine fever fears are in the market again," said Doug Houghton, analyst with Brock Associates Inc. "China found an outbreak in Sichuan, which is their largest pork producing province, and also they found it in a wild boar. It just looks like it's getting worse." The virus has been confirmed in than 60 locations in 18 provinces over the past three months despite government efforts to curb its spread. Hogs were also propelled higher by hopes for a thaw in tense trade relations between the United States and China, the world's top pork consumer, after U.S. President Donald Trump said he may not impose more tariffs on Chinese goods. Beijing slapped tariffs on U.S. pork in retaliation for U.S. tariffs on Chinese goods, effectively halting exports to China. CME December hogs settled at 60.075 cents per pound and February closed at 66.750 cents, both up their daily 3.000-cent limit and above all major moving averages. April futures also closed limit-up, and the June 2019 through October 2019 contracts all posted new highs. Trading limits will expand on Monday to 4.500 cents after the limit-up close, the exchange said. Live cattle futures ended mixed, with nearby contracts lifted by spillover support from rallying hogs. News that officials in Japan, the top beef importer, are discussing lifting restrictions on U.S. beef from cattle older that 30 months remained supportive for cattle, traders said. Light cash cattle trade at U.S. Plains feedlot markets at mostly $114 per cwt, steady with last week, also underpinned nearby futures. CME December live cattle ended 0.200 cent higher at 115.350 cents per pound, while February futures , the most active month, rose 0.625 cent to 119.725 cents. Traders are looking ahead to next week's U.S. Department of Agriculture Cattle on Feed report, which is expected to show Nov. 1 on-feed supplies at 104.4 percent of a year ago. Feeder cattle futures ended lower in a profit-taking dip after strong gains earlier this week. Actively traded January feeder cattle ended 1.325 cents lower at 146.525 cents per pound, while March fell 0.575 cent to 143.975 cents. (Reporting by Karl Plume in Chicago Editing by Matthew Lewis)

LIVESTOCK-Lean hogs rise on technical buying, good demand outlook

15 Nov 2018

By Karl Plume CHICAGO, Nov 15 Chicago Mercantile Exchange lean hog futures firmed for a fourth straight session on Thursday, lifted by technical buying and good demand for pork, traders said. Persistent concerns about the spread of African Swine Fever in China, the world's top hog and pork producer, also underpinned prices as forecasts for big global hog supplies were seen tightening due to the outbreak. "There's a little more demand optimism that is helping carry things a bit in the hogs, as well as long-term supply concerns," said Matthew Wiegand, a broker with FuturesOne. "The swine fever stuff is just going to linger out there until we know more about that," he said. CME December hogs rose 0.075 cent to settle at 57.075 cents per pound. The more active February hog contract was up 1.400 cents at 63.750 cents, breaking through chart resistance at its 20-, 30- and 200-day moving averages. The market remained cautious ahead of a meeting between U.S. President Donald Trump and China's Xi Jinping in Argentina later this month, when the leaders will discuss the trade dispute that has weighed on commodity markets for months. Beijing slapped tariffs on U.S. pork in retaliation for U.S. tariffs on Chinese goods, effectively halting exports to China. CATTLE RISE Live cattle futures ended mostly higher on news that top beef importer Japan was considering scrapping import restrictions on U.S. shipments that were put in place when the first U.S. case of mad cow disease was discovered in 2003. Officials in Japan were reported to be discussing lifting restrictions on U.S. beef from cattle older that 30 months, according to local media. Futures traders are also awaiting more active cash cattle trade at U.S. Plains markets, where packers are not expected to buy as many cattle as normal this week because of slaughterhouse downtime next week during the Thanksgiving holiday. Packer bids were around $113 to $114 per cwt on cattle offered at $116 or more. The bulk of sales last week were at $114. CME December live cattle ended 0.550 cent higher at 115.150 cents per pound, while February futures , the most active month, rose 0.500 cent to 119.100 cents. Feeder cattle futures ended mostly higher on spill-over support from live cattle. Actively traded January feeder cattle ended 0.875 cent higher at 147.850 cents per pound, while March gained 0.750 cent to 144.550 cents. (Reporting by Karl Plume; Editing by David Gregorio)

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