LIVESTOCK-U.S. hog futures hit 4-month high as cash values firm

By Julie Ingwersen

CHICAGO, Sept 9 (Reuters) - U.S. lean hog futures rose on Wednesday, reaching a four-month high on firming cash hog prices, optimism about pork demand and technical buying, analysts said.

The Chicago Mercantile Exchange October lean hog futures contract settled above its 200-day moving average, rising 1.475 cents to end at 61.375 cents per pound after reaching 61.725 cents, its highest since April 28.

Cash hog prices in the Iowa and southern Minnesota market jumped by $4.98 per cwt on Wednesday and the average U.S. negotiated cash price rose $3.49, according to the U.S. Department of Agriculture.

"The cash market is looking strong. The question is whether the pork market can keep up, in order to keep packer margins strong," said Doug Houghton, analyst with Brock Associates.

Wholesale pork prices showed mixed signals. The U.S. pork cutout value was up $2.72 per cwt from Tuesday in the USDA's midmorning report, which helped lift CME hog futures. But the government's afternoon revision, released after the CME close, showed the cutout down 78 cents from Tuesday.

On the export front, the last two weekly USDA export sales reports have shown robust U.S. pork sales, especially to top global buyer China. The USDA's next weekly export sales report is due Friday, delayed a day due to Monday's federal holiday.

CME live cattle futures closed lower on a disappointing start to cash cattle trade, despite strong packer margins. Market-ready cattle traded in Nebraska at $101 per cwt, down $1 to $2 from the bulk of last week's trade, the USDA said.

Softer wholesale beef prices added pressure. The choice boxed beef cutout value fell on Wednesday afternoon to $222.95 per cwt, down $1.87 from Tuesday and down $2.90 from Friday.

"The boxed beef cutout values ... got no apparent bounce from Labor Day, so that is certainly not a positive factor," Houghton said.

CME October live cattle futures settled down 1.075 cents at 104.700 cents per pound. October feeder cattle futures ended down 1.600 cents at 138.250 cents per pound. (Reporting by Julie Ingwersen; Editing by Tom Brown)

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