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U.S. livestock: Hog futures near three-month high

Cattle flat in technical trading

Chicago | Reuters — U.S. lean hog futures climbed to a nearly three-month high on Wednesday, boosted by gains in cash hog markets, before futures trimmed gains to finish the session mixed.

Cattle futures were nearly flat on the Chicago Mercantile Exchange, in technical trading as dealers awaited a monthly U.S. Department of Agriculture cattle report due on Friday.

Investors continued to exit positions in front-month CME October hog futures and roll into deferred contracts. October hogs finished up 0.825 cent at 60 cents/lb., highest since June 29, while most active December hogs edged 0.075 cent lower, to 57.9 cents.

Cash hog prices continued to rise in the key Iowa and southern Minnesota market, according to USDA data.

Some U.S. traders were optimistic that the outbreak of African swine fever in China — the world’s top pork producer — could eventually force buyers there to increase pork imports.

China’s sow herd fell in August by 4.8 per cent from a year earlier, the country’s State Council said, in data that an analyst said partially reflected the disease.

Hurricane Florence also disrupted the hog slaughter this week in North Carolina, the No. 2 U.S. pork state after Iowa, potentially tightening pork supplies temporarily.

“The underlying strength is there; there just doesn’t seem to be any rush to buy it,” S+P Global Platts Analytics analyst Peter Meyer said of hog futures.

CME October live cattle settled 0.125 cent lower at 113.1 cents/lb. and most-active December cattle were unchanged at 117.975 cents. October feeder cattle futures were down 0.15 cent, at 157.875 cents.

Traders were waiting for deals to develop in cash cattle markets, after better-than-expected cash sales of $111/cwt last week in the U.S. Plains helped to boost futures on Friday.

Zero cattle sold out of 528 head offered on the weekly online Fed Cattle Exchange auction, according to the auction website.

USDA this Friday will release its monthly Cattle on Feed report. Analysts polled by Reuters expected the government to show about four per cent more cattle placed in feedlots for fattening during August.

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

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