Chicago | Reuters — U.S. lean hog futures rose on Thursday in a rebound from a one-month low reached in the previous session, while live cattle futures weakened.
The hog market’s recovery carried futures to their highest level since Monday. Traders said the market continues to face pressure from large U.S. supplies and uncertainty over export demand from China, the world’s top pork importer.
“The hog market is more than anything a correction of the technicals,” a commodities broker said. “We pressed the market down pretty hard. It seems like we’re just balancing back.”
December lean hog futures finished one cent higher at 65.8 cents/lb. at the Chicago Mercantile Exchange (all figures US$). That contract on Wednesday dropped to its lowest price since Oct. 7.
A decline in futures prices for corn and soybeans, which are used for animal feed, was supportive for livestock futures on Thursday, a trader said.
CME January feeder cattle futures rose 0.525 cent to 140.725 cents/lb. after falling the previous two session on concerns over rising feed costs.
Soybean prices on Wednesday neared a 4-1/2 year high, while corn topped a one-year high after the U.S. Department of Agriculture (USDA) slashed its crop harvest and inventory estimates in a monthly report on Tuesday.
Traders on Friday will monitor a weekly USDA export sales report to assess China’s pork demand. The agency will issue the report a day later than normal due to Wednesday’s federal holiday.
China is attempting to rebuild its hog herd after a fatal pig disease, African swine fever, decimated its pork industry over the past two years.
“We think they’ve been rapidly expanding over there,” a U.S. broker said.
In the beef market, CME December live cattle futures eased 0.425 cent to 111.975 cents/lb. It was a slight setback after the contract on Wednesday hit its highest price since Oct. 12 at 112.7.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.