March 7, 2018 / 9:26 PM / 7 months ago

LIVESTOCK-Trade war jitters knock CME hogs to 3-month low

    CHICAGO, March 7 (Reuters) - Chicago Mercantile Exchange
lean hog futures        on Wednesday hit a three-month low,
partly rattled by talk of a potential trade war if the U.S.
tacks higher tariffs on imported steel and aluminum, traders
said.
    Wednesday's U.S. stock market slumped as U.S. President
Donald Trump appears poised to impose steep tariffs this week
that could hurt allies of the United States, including Mexico
and Canada.
    Roughly one quarter of pork produced in the United States is
exported. Mexico and Canada are the top- and fourth-ranked
markets for U.S. pork by volume, according to industry experts. 
    "When you're talking about messing with trade in our four or
five largest trade partners on pork, there isn't anything
positive that could come out of that," said independent market
analyst Mike Sands.
    CME lean hogs were further pressured by lackluster domestic
meat demand in the midst of the Lenten season, said traders. A
nor'easter is pounding parts of the East Coast which could hurt
demand there.         
    Heavy snowfall in the northeastern region of the country 
likely shut down a hog packing plant in the area, a Midwest hog
merchant said.          
    Despite demand headwinds, packers are competing for hogs
while capitalizing on their impressive margins, said analysts
and traders.         
   April hogs         closed down 0.400 cents per pound at
67.800 cents. May         finished 1.650 cents lower at 72.600
cents.

    LIVE CATTLE GAIN SLIGHTLY
    CME live cattle rose modestly on short-covering and
investors that priced in initial prices for slaughter-ready, or
cash, cattle, said traders.
    Uneasiness about a U.S. trade war risk capped live cattle
futures advances.
    "Everybody right now is a little concerned about where we
are right now with tariffs. Nobody really wants to step into
this thing (market) one way or the other," said JRS Consulting
owner Jack Salzsieder.
    April         live cattle closed up 0.150 cent per pound at
122.975 cents. June         finished up 0.050 cent at 114.825
cents.
    Packers so far paid $126 per cwt for a few cash cattle in
the U.S. Plains and at Wednesday's Fed Cattle Exchange auction.
Last week's cattle prices were $125 to $127.50.
    Other feedlots want $128 to $130 per cwt for their livestock
based on rising packer profits.            
    Processors are resisting bidding up for cattle that are more
plentiful than last week.
    Steady-to-lower feeder steer prices weighed on CME feeder
cattle contracts. 
    March         feeders ended 0.525 cent per pound lower at
143.775 cents.

 (Reporting by Theopolis Waters; editing by Grant McCool)
  
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