6 March 2025

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) lean hog futures rose on Wednesday, bouncing from 5-1/2-month lows set a day earlier on hopes that U.S. tariffs against Mexico and Canada could be reduced, Reuters reported, citing traders.

Firming cash hog prices lent support as well.

The benchmark CME April hog contract settled up 2.350 cents at 84.700 cents per pound, a day after hitting its lowest level since mid-September. June hog futures ended up 1.425 cents at 94.757 cents.

Traders remained fixated on trade tensions after US President Donald Trump imposed 25% tariffs on imports from Mexico and Canada on Tuesday and doubled duties on Chinese goods to 20%. The duties drew immediate retaliatory steps from Canada and China and a pledge from Mexico to also respond.

Mexico was the largest market for US pork in 2024 while China was the No. 3 customer after Japan.

But on Wednesday, the White House said Trump would exempt automakers from his tariffs on Canada and Mexico for one month as long as they comply with the terms of an existing free trade agreement, and said he is open to hearing about other products that should be spared.

"The idea that Trump is open to hearing about things that should have exemptions, provided some support," said Doug Houghton, an analyst at Brock Associates. "But also, wholesalepork prices were firmer, and the cash (hog) index was a bit firmer."

The CME's Lean Hog Index, a two-day weighted average of cash prices, was up 0.28 cent at 90.22 cents per pound. Also, the index was priced more than 5 cents above the April hog futures contract, a supportive sign for futures.

Cattle futures climbed on follow-through momentum from Tuesday's strong technical close, in which the CME's benchmark April live cattle contract hit a two-month low before rallying and closing higher on the day.

"The technical signal yesterday was positive, and that had a lot to do with today's rally," Houghton said.

CME April live cattle settled up 1.900 cents on Wednesday at 196.550 cents per pound. April feeder cattle futures ended up 3.575 cents at 276.075 cents per pound.

Bargain-buying and resilient wholesale beef prices lent support, although the US Department of Agriculture's boxed-beef cutout values declined a bit on Wednesday.