November 15, 2010
 

US cattle, hog futures down amid speculation on China's interest-rate hike

US cattle and hog futures fell on Friday (Nov 12), tumbling along with most commodities amid speculation that China will hike interest rates.

In cattle, lower beef prices, a lower stock market and steady cash trade added pressure.

"China is going to control everything today," said Peter Adams, principal at PNM Trading. "There is a whole lot behind the stage here that's moving us around. China appears to be one of the major actors."

USDA's monthly meat export report on Friday put US beef exports at 185.57 million pounds in September, up from 162.43 million a year ago.

Of that total, 12.83 million lbs. went to China and Hong Kong versus 9.63 million a year ago. For the year-to-date the two countries bought 83.42 million lbs. versus 55.7 million a year earlier.

Beef imports during September declined to 156.4 million from 177.3 million lbs. a year ago.

The failure of the US to secure a free-trade agreement with South Korea last week weighed on cattle. The market anticipated that an agreement would have lowered South Korea's tariff on US beef and increased beef sales there.

"There was talk they were going to lift their tariffs on some cuts of beef immediately and that would have been bullish for everything in meats. But it fell apart," said Bill Cipolla, a Chicago hog trader.

December live cattle closed down 0.650 cent at 98.400 cents per lb. and February was down 1.175 at 101.700 cents.

Feeder cattle traded higher much of the session supported by losses in CBOT corn futures, but slipped late when deferred live cattle contracts fell.