September 27, 2019 / 8:52 PM / 17 days ago

LIVESTOCK-Cattle futures surge as trade grows bullish on potential U.S. exports to Japan

CHICAGO, Sept 27 (Reuters) - U.S. live and feeder cattle futures on Friday surged to their highest prices seen in nearly a month, as the cash market began to firm and traders grew more bullish about export demands after the U.S. and Japan signed a limited trade deal this week.

The first-phase deal would open up Japanese markets to some $7 billion worth of U.S. products annually, cutting Japanese tariffs on American beef, pork, wheat and cheese, U.S. President Donald J. Trump said earlier this week.

Meanwhile, feeder cattle are trading above where they were before a fire at a Tyson Foods Inc slaughterhouse last month removed a key buyer from the market, sending prices tumbling.

The slaughterhouse remains closed for repairs but meat packers have been killing more cattle at other facilities in the meantime.

U.S. hog futures were mixed on Friday, as traders continued to wrestle with disappointing pork export sales to China and a cash market prices that seem unusually depressed, analysts said.

The market has been waiting for a serious push in pork exports, traders said, because China struggles with an outbreak of African swine fever, a fatal pig disease that has decimated its herd over the past year. The disease has also spread to Vietnam, South Korea and other countries.

“We’re in a supply bear market,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “Our basis levels are way distorted.”

Adding to those hog market pressures, traders said, is the fact that the U.S. has a huge herd.

After the market closed on Friday, the U.S. Department of Agriculture reported that the total U.S. hog herd was up more than 103% as of Sept. 1, compared with the same period a year earlier - the highest Sept. 1 inventory of all hogs and pigs since the estimates began in 1988.

That exceeded analysts expectations of 102.8%, according to a Reuters survey.

December lean hog futures finished down 0.525 cents at 69.85 cents per pound at the Chicago Mercantile Exchange.

In the beef market, December live cattle futures closed up 1.825 cent at 110.575 cents per pound.

November feeder cattle futures closed up 1.525 cent at 142.975 cents per pound. (Editing by Marguerita Choy)

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