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LIVESTOCK-CME lean hog futures fall on profit-taking
By Tom Polansek
CHICAGO, April 23 (Reuters) - U.S. hog futures sagged on profit-taking on Tuesday after a recent run-up to contract highs, traders said.
Live cattle futures also slumped at the Chicago Mercantile Exchange.
The most actively traded June hogs contract has pulled back about 7.5 percent after setting a contract high on April 5 on expectations that China will further increase its pork imports because of an outbreak of a fatal hog disease called African swine fever.
Traders still project that China, home to the world's largest hog herd, will need to import more pork from the United States and other suppliers, such as the EU.
However, a decline in cash prices on Monday and a lack of fresh news opened the door for some profit taking, said Matthew Wiegand, broker at FuturesOne.
"With the soft cash action, and nothing new to spark that next round of buying, we're just kind of seeing a pullback," he said.
The benchmark June lean hogs contract ended down 1.400 cents at 92.375 cents per pound. October hogs fell 0.225 cents to 92.700 cents per pound.
Traders are waiting for the U.S. Department of Agriculture to report weekly pork export sales on Thursday to see whether China has continued buying.
"We put another good number there and we'll pop back pretty quick," Wiegand said.
Last week, the USDA reported China bought 23,473 tonnes of U.S. pork in the week ended April 11. That was China's third biggest purchase since the USDA began tracking sales in 2013.
In the cattle market, most-active June live cattle futures have dropped about 3 percent from a contract high set on March 22. Prices came under pressure from long liquidation and weakness in the hog market, traders said.
Warmer, drier weather in the U.S. Plains is also allowing cattle to gain weight more easily. The cold and snowy winter previously slowed weight gain in cattle, which consume feed to generate body heat.
CME June live cattle futures fell 0.450 cents to settle at 121.125 cents per pound. August live cattle futures closed down 0.575 cent at 118.200 cents per pound.
August feeders edged up 0.075 cents to 159.700 cents.
In other news, four of the largest U.S. beef-packing companies were accused in a lawsuit on Tuesday of violating federal antitrust law by conspiring to drive down prices they paid ranchers for cattle. (Reporting by Tom Polansek in Chicago Editing by Marguerita Choy)
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