CHICAGO, April 3 (Reuters) - Chicago Mercantile Exchange lean hog futures charged higher on Wednesday, with the most-active May contract surging 5.4 percent, on hopes for a trade deal with China that would boost exports to the world’s largest consumer of pork.
“U.S.-China trade talks restart in D.C. today and most accounts have those negotiations going relatively well, with one source indicating the deal is 90 percent done,” INTL FCStone said in a note to clients.
White House economic adviser Larry Kudlow said on Wednesday that talks are progressing and both sides hope to get closer to a deal this week as negotiators prepared to start a fresh round of talks in Washington.
The expiring CME April lean hogs contract ended up 0.125 cents at 79.075 cents per pound. May hogs were 4.40 cents higher at 88.40 cents and June hogs, the most active contract, rose 3.35 cents to close at 94.85 cents.
Both the May and June contracts had expanded trading limits on Wednesday after closing up the 3 cent daily limit on Tuesday.
Concerns about African swine fever further boosting China’s demand for pork imports also supported the hog market. China’s agriculture ministry said on Wednesday it will require pork processors handling raw pork to test for the presence of the virus starting May 1.
Brazilian food processor BRF said on Wednesday that Brazil will step up pork exports to China where the swine fever outbreak is a “transformational event” for the global meat industry.
Cattle futures dropped on pressure from a weak cash market. The front-month live cattle contract hit its lowest since Feb. 14.
April live cattle futures were 0.500 cent lower at 125.775 cents per pound while the actively traded June contract dropped 0.65 cent to 119 cents.
April feeder cattle futures were off 0.100 cent at 144.750 cents per pound while May feeders were down 0.525 cent at 147.275. (Reporting by Mark Weinraub; editing by Grant McCool)