Chicago Mercantile Exchange (CME) cattle and hog futures rallied on Wednesday as US President Donald Trump said he would temporarily lower many of the hefty tariffs he announced last week, though levies on Chinese imports into the country are set to rise to 125%, reported Reuters.
CME June live cattle futures rose 4.750 cents to end at 198.375 cents per pound, while May feeder cattle futures closed up 6.475 cents at 278.200 cents per pound.
In the lean hog market, June futures rose 1.925 cents to finish at 91.700 cents per pound, having earlier hit their lowest point since August 15.
After a choppy start to the day, livestock futures got a boost when Trump announced the 90-day tariff pause, which drove a huge rally in the equities market, pulling commodities along with it.
The rally in livestock futures came despite Trump saying the US would raise tariffs on China, a large consumer of US beef and the world's largest consumer of pork.
Cattle and hog futures plunged earlier in the week as Trump said he would impose additional duties on US imports from China if the world's No. 2 economy did not withdraw the retaliatory 34% levy it had imposed on US products last week.
The escalation in the trade war between the two countries led to fears of a US economic downturn and falling demand for beef and pork, according to analysts.
Managed money held large net long positions in cattle in particular, heading into the tariff story, said Altin Kalo, head economist at Steiner Consulting Group. But with the cascade of tariff headlines, investors tried to get out of those positions in a short period of time, causing the sharp corrections seen earlier in the week.
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