Chicago | Reuters – U.S. lean hog futures fell for the sixth time in seven sessions on Thursday, pressured by weak cash hog prices and disappointing export data that showed minimal new sales of U.S. pork to China.
Ample supplies of hogs and higher average slaughter weights have swelled pork supplies while demand from China, the world’s largest pork consumer, has been largely disappointing.
The U.S. Department of Agriculture (USDA) on Thursday reported 20,470 tonnes in pork was sold for export in the week ended Oct. 17, the least in five weeks. The sales included just 2,002 tonnes to China, USDA data showed.
Chicago Mercantile Exchange (CME) December lean hog futures settled 1.275 cents lower at 64.550 cents per pound, while February futures fell 1.625 cents to 73.475 cents per pound.
“December hogs are still trading at a firm premium over cash prices and February hogs are trading at a 9-cent premium over the December,” said Ted Seifried, chief market strategist for Zaner Ag Hedge in Chicago.
“If cash isn’t going to rally on these China sales, we can’t justify these higher prices on the board,” he said.
Cash hog prices in the closely followed Iowa and southern Minnesota market were $1.53 per cwt lower on Thursday to a weighted average price of $53.68 per cwt, according to the USDA, more than $10 per cwt below December futures prices.
The wholesale hog carcass price fell 51 cents on Thursday to $74.53 per cwt, the USDA said.
Live cattle futures scaled to a fresh 5-1/2 month high on fund buying and technical support, but ended mostly lower after late-session profit-taking and spillover pressure from lower hogs.
Traders are looking ahead to Friday’s monthly USDA cattle on feed report, which is scheduled for release after markets close. Analysts polled by Reuters expect the report to show a 1.6% rise in cattle placements in September.
CME December live cattle ended 0.525 cent lower at 114.725 cents per pound while February futures were down 0.375 at 120.050 cents.
Feeder cattle futures followed live cattle lower, with November futures down 0.575 cent at 144.175 cents per pound and the actively traded January contract down 0.625 at 140.575 cents.