CME live, feeder cattle futures reach record highs
Hog futures rally as fears subside over trade disruptions
5 February 2025
2 minute read
By: Chicago Mercantile Exchange (CME) lean hog futures shot higher on Tuesday as traders shook off concerns that tariffs could disrupt demand for US pork from top-importer Mexico, reported Reuters.
The rally was a turnaround after trade concerns pushed prices down by their exchange-imposed limit on Monday.
US President Donald Trump had threatened Mexico and Canada with 25% tariffs but pushed their application back by 30 days on Monday in exchange for promises to fight drug trafficking and immigration. A month is more than enough time to reach an agreement with the United States, Mexican Economy Minister Marcelo Ebrard said.
The postponement encouraged expectations among hog traders that Mexican demand will continue.
"It's a relief rally," said Matt Wiegand, commodity broker for risk management firm FuturesOne in Nebraska.
China, the world's biggest pork consumer, on Tuesday imposed limited tariffs on US imports, not including pork. The measured response to Trump's decision to slap 10% tariffs on all Chinese imports also helped alleviate concerns about potential trade disruptions.
"The fears that we had on Friday and early Monday have all kind of fallen away," a trader said.
Most-active April lean hog futures closed up 3.4 cents at 89.750 cents per pound after tumbling by CME's 4-cent limit on Monday.
In cattle, CME futures slumped as the postponed US tariffs against imports from Canada and Mexico signalled that cattle will continue being shipped into the United States, traders said.
Washington also eased supply concerns by announcing over the weekend that it would soon resume cattle imports from Mexico that were halted over the discovery of a pest, traders said.
Most-active CME April live cattle futures fell 1.5 cents to 198.650 cents per pound on Tuesday and touched the lowest price since Jan. 22. CME March feeder cattle lost 2.25 cents to end at 268.250 cents per pound and reached the lowest level since Jan. 21.
Live cattle and feeder cattle futures reached record highs recently in front-month contracts last as demand for beef was high and inventories tight.
"We were due for a bit of a correction and we're certainly seeing that," Wiegand said.
