U.S. livestock: Hogs slump on technical selloff, cash worries

Chicago | Reuters — U.S. lean hog futures declined as much as 1.4 per cent on Monday in technical selling and worries of weaker prices for hogs in cash markets, traders and analysts said.

Cattle futures, meanwhile, were mostly higher on light chart-based buying in an abbreviated session at the Chicago Mercantile Exchange ahead of Tuesday’s Christmas holiday.

Prices for hogs often slump around the new year as meat demand tapers following the busy holiday season.

No cash prices for hogs or cattle were released on Monday by the U.S. Department of Agriculture due to a previously announced federal holiday. Many livestock reports were expected to be issued later this week even as parts of the U.S. government closed due to the shutdown over federal funding.

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CME February lean hog futures settled down 0.825 cent at 60.3 cents/lb., the lowest since Nov. 12 (all figures US$).

The contract still was trading at a premium to CME Group’s index of the cash hog market of 53.87 cents. Unless cash hog prices rise, futures may come under further pressure to close the gap between the cash and futures markets.

“The hog market continues to carry a premium to the declining cash market,” said Top Third Ag Marketing analyst Craig VanDyke. “It’s a battle for the (bullish traders) to build any sort of momentum.”

February hog futures have dropped by about 13 per cent since their contract highs notched on Nov. 20.

Both live cattle and feeder cattle futures firmed in light-volume trading, buoyed in part by comparatively stronger demand for beef than pork.

CME February live cattle settled up 0.075 cent at 122.775 cents/lb. while the April contract touched a contract high of 125.4 cents before settling at 125.225 cents, up 0.4 cent.

CME January feeder cattle finished up 0.025 cent at 147.375 cents/lb.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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