By mid-March 2018, rhetoric regarding trade relations between the United States and China began to heat up. President Trump started this earlier in the year with an announcement of steel and aluminum tariffs. Later he focused more on China and Chinese officials responded in kind. The heated-up rhetoric seemed to be capable of starting a serious trade war in which each country would boost tariffs that would raise the cost of the other nation’s exported products.
In lean hogs, on a seasonal basis, we have generally tighter supplies from the start of the year into April. After late April, supply takes a more dramatic decline into the year's lows in the summer. That does not mean price goes straight up in this period. Spring is a period where a little shake-up is normally seen. Traders are aware of a slight slump in prices from the minor February or March peak into spring.
U.S. chicken and pork exports could benefit from continued problems this year; FOR live cattle, The general adage is that we get two limited rallies each winter due to storms/cold weather.
USDA's daily kill estimate today showed a minor revision for last week.
Cattle futures finished the day lower for the fifth consecutive.
Officially the general uptrend in hog futures pricing still stands.
Lean hog futures continued their mild rebound. Today marks the seventh day since the Nov. 15 minor low was placed; Though cattle prices did have a sharp drop from spring highs down to summer lows, the general theme since August has been bullish.
Live cattle prices have risen more than 14% since the September low, and more than 40% since their October 2016 low.
Futures did well today. This is likely more from the cattle market touching limit up today than any new news for hogs but no one will complain too much.
New highs were reached in hog during yesterday's move. It was not that surprising to see how well live cattle futures came back from the lower open today.