Chicago | Reuters — U.S. lean hog futures closed mostly lower on Wednesday, with the benchmark February contract declining for a third straight session on technical selling and weak cash values, traders said.
Chicago Mercantile Exchange February lean hog futures settled down 0.55 cent at 64.5 cents/lb. after the contract dipped below its 50-day moving average for the first time since Nov. 16 (all figures US$).
Front-month December hogs edged up 0.075 cent to end at 57.95 cents.
“The technicals are breaking down. The supplies are starting to weigh on the market,” said Don Roose, president of Iowa-based U.S. Commodities.
Concern about soft cash hog values has been overshadowing support from expectations that African swine fever in China’s massive hog herd eventually could lead to increased demand for U.S. pork, Roose and others said.
Livestock traders were positioning ahead of expected U.S.-China talks at the G20 summit later this week in Argentina. U.S. President Donald Trump is due to meet there with Chinese counterpart Xi Jinping for the first time since the world’s two largest economies imposed punitive tariffs on each other’s imports.
“The question is what happens on demand, and we’ll get a better look at that after these meetings,” Roose said.
Hopes for a U.S.-China trade war ceasefire helped lift Wall Street equities along with soy and grain futures.
Xi, ahead of the G20 meeting in Argentina, said China will widen market access for foreign investors and step up protection of intellectual property rights.
CME live cattle futures closed modestly lower Tuesday and feeder cattle futures followed the weak trend.
CME February live cattle futures settled down 0.05 cent at 120.55 cents/lb. and January feeder cattle ended down 0.725 cent at 147.7 cents.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.