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LIVESTOCK-Cattle, hog futures sag under pressure from big supplies

By Tom Polansek

CHICAGO, June 12 (Reuters) - U.S. livestock futures weakened on Wednesday under pressure from large numbers of cattle and hogs and uncertainty over demand, traders said.

Declines in the markets reflected expectations that meat supplies will remain plentiful, after farmers expanded their herds.

Beef production in the third quarter of 2019 is expected to top 7 billion pounds, up 3% from a year earlier, according to U.S. Department of Agriculture (USDA) data issued on Tuesday. Output in the fourth quarter is seen at 6.95 billion, up about 1.3% from the previous year.

"We've just got a lot of beef to wade through," said Dennis Smith, commodity broker form Archer Financial Services in Chicago. "It's going to stay in a downtrend."

Most actively traded August live cattle fell 1.625 cents to 105.200 cents per pound at the Chicago Mercantile Exchange.

CME August feeder cattle dropped 0.325 cent to 137.800 cents per pound.

CME July lean hogs ended flat at 84.375 cents per pound, while August hogs slumped 0.450 cent to 82.525 cents per pound.

Hog traders on Thursday will review weekly export sales data for sales of U.S. pork to China.

China, the world's largest pork consumer, is expected to increase total imports because an outbreak of the fatal hog disease African swine fever is reducing its herds.

China's Ministry of Agriculture and Rural Affairs said on Tuesday that the southern province of Guizhou confirmed a new outbreak of African swine fever in Duyun city.

China has reported more than 120 outbreaks of the disease since it was first detected in the country in early August last year.

"The lack of any real commitment from China to be buying U.S. pork is a little negative," said Brian Hoops, president of U.S. broker Midwest Market Solutions.

Rising U.S. grain prices could eventually help support CME livestock futures by making it more expensive to feed farm animals, analysts said.

Corn and soybean futures reached one-week highs at the Chicago Board of Trade on concerns about wet weather disrupting plantings and threatening yields.

"If corn prices start escalating and get real high, it will discourage overfeeding of animals, so in theory weights should come down," Smith said.

"It could end any expansion talk or desires in both markets - cattle or hogs."

The average weight for hogs in Iowa and southern Minnesota, two major producing areas, was 285.2 pounds in the week ending June 8, up 2.3% from last year, according to the USDA. (Reporting by Tom Polansek in Chicago Editing by Susan Thomas)

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