CHICAGO, May 6 (Reuters) - U.S. lean hog futures plunged by the daily trading limit on Monday, and cattle was lower, amid worries about the spread of African swine fever and fears that President Donald J. Trump will follow through with threats to impose additional tariffs on China.
The tariff threat, which sparked broad selling on equity and commodity markets, clouded prospects for a trade settlement between the world's two largest economies.
U.S. pork shipments have been impeded by steep Chinese import tariffs, imposed as part of a trade war between the two countries: Beijing raised duties on imports of U.S. pork to 62 percent last year.
"It's on days like today, you get to see what a market is really worth," said Don Roose, president of U.S. Commodities. "Everyone is spooked."
The news of Trump's trade threat came as hog futures had been trading mostly higher recently, lifted by expectations for accelerated U.S. pork imports by China, where the domestic hog herd has been ravaged by African swine fever (ASF).
ASF, which is fatal to pigs but harmless to humans, has been detected in China, Vietnam, Cambodia, South Africa and parts of Europe.
On Monday, U.S. meat processor Tyson Foods Inc's Chief Executive Officer Noel White estimated the loss at 150 million to 200 million pigs so far.
But the funds began shedding even more of their long positions on Monday, traders said, as hopes of China taking a big bite out of the U.S. record supplies of hogs wavered in the face of Trump's threats.
Meanwhile, the threat of ASF showing up in the U.S. hog herds continues to hang over the domestic industry.
"The rate in which it has spread over the course of the last 12 months makes it very plausible that it could come to the United States," White told Reuters.
Lean hog futures for the June 2019 and July 2019 contracts ended the day down the 3-cent limit on Monday. CME said it will expand the daily limits in hogs to 4.5 cents on Tuesday.
CME June lean hogs ended the day down 3 cents at 89.750 cents per pound, while July futures were also down 3 cents at 92.675 cents.
Live cattle futures also fell on Monday, with the actively traded Chicago Mercantile Exchange (CME) June contract down for an eleventh straight session on sinking beef and cash cattle prices, and long liquidation by managed commodity funds.
Feeder cattle futures also fell very hard, traders said, with questions about how low prices could fall in the coming days and weeks.
One key problem: Chilly, rainy weather has continued to press on U.S. demand for beef for outdoor grilling this spring.
June live cattle ended down 1.000 cent at 112.425 cents per pound, its lowest since Nov. 13. August cattle ended down 0.550 cent at 108.600 cents per pound.
August feeder cattle were down 1.900 cents at 144.475 cents per pound, while September was down 1.425 cents at 145.725 cents. (Reporting by P.J. Huffstutter in Chicago; Editing by Tom Brown)