CHICAGO, May 28 (Reuters) - U.S. lean hog futures dropped by as much as the daily trading limit on Thursday on worries that rising tensions between Washington and Beijing could limit U.S. pork purchases by China, the world’s largest pork consumer.
Sino-U.S. relations have worsened as the White House has threatened China with sanctions over its handling of the coronavirus crisis and, most recently, over Beijing’s moves to tighten authority over Hong Kong.
China has dramatically ramped up imports of U.S. pork since last year after a deadly swine disease killed nearly half of the country’s hogs and as Beijing worked to meet its Phase 1 trade deal commitments to boost purchases of U.S. farm goods.
“I’ve reined in my expectations for Chinese buying,” said Rich Nelson, chief strategist with Allendale Inc.
Continued concerns over hog supply chain disruptions and pork plant closures due to coronavirus infections among workers also weighed on prices, he added.
More than 3,000 U.S. meatpacking workers have tested positive for COVID-19 and at least 44 have died, the country’s largest meatpacking union said on Thursday.
Chicago Mercantile Exchange (CME) June lean hogs ended 3.250 cents lower at 56.925 cents per lb. Most-active July futures traded limit-down but ended 3.650 cents lower at 55.650 cents per lb.
CME live cattle futures ended mostly higher, with nearby contracts lifted by their steep discount to cash cattle prices.
June live cattle settled 0.675 cent higher at 101.475 cents per lb, while actively traded August rose 0.450 cent to 101.175 cents per lb.
Cattle have traded at central and southern U.S. Plains feedlot markets this week from $113 to $120 per cwt, about steady with a week ago but well above nearby futures prices.
Feeder cattle futures largely followed live cattle higher, with benchmark August futures up 1.425 cents at 135.500 cents per lb. (Reporting by Karl Plume)
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