Cattle and hog futures drop amid concerns over beef and pork exports

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CHICAGO, Dec.15 (Reuters) – Chicago Mercantile Exchange live cattle futures fell more than 1% on Wednesday amid technical sales, the slowdown in cash cattle markets this week and concerns over demand beef exporters, traders said.

Live cattle in the February CME fell 1.725 cents to 136.575 cents per pound, just below the contract’s 50-day moving average of close to 136.7. The CME’s benchmark March feeder cattle futures closed 1.925 cents to 164.475 cents per pound.

Commodities funds hold a net long position in CME live cattle and lean pig futures, leaving both markets vulnerable to a long sell-off towards the end of the year.

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The Chinese customs administration has announced that it will allow the resumption of imports of certain Brazilian beef products, ending an embargo in effect since September 4. Read more

“This could be part of the reason why (upcoming) cattle are under more selling pressure today. US beef exports to China have been quite strong recently,” Dan Norcini said, an independent cattle trader.

Wholesale canned beef prices continued their decline, with the choice slipping $ 0.46 to $ 260.26 per cwt, the lowest since early April, according to the US Department of Agriculture.

CME lean pork futures closed lower for a third consecutive session, under pressure from news that China will increase import tariffs on most pork products next year.

The February CME hogs settled 0.750 cents to 79.325 cents per pound.

China had lowered tariffs on frozen pork in 2020 as the country faced soaring meat prices following a devastating outbreak of African swine fever, a swine disease. But China quickly developed its national production, limiting its import requirements. Read more

“This indicates what the current state of their pork supply is. They might not be big buyers in the first half of next year,” said Altin Kalo, economist at Steiner Consulting Group.

On a positive note for futures, the value of wholesale pork in the United States rose, the carcass priced at $ 87.83 per cwt, up $ 2.35 from Tuesday, reported the ‘USDA.

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Reporting by Julie Ingwersen; Edited by Ramakrishnan M.

Our standards: Thomson Reuters Trust Principles.


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