CHICAGO, Oct 9 (Reuters) - U.S. lean hog futures fell more than 1 percent on Tuesday, weighed down by technical selling and expectations that supply will increase, traders said.
Cattle futures were only slightly lower on the Chicago Mercantile Exchange, staying within the narrow range that has defined the trade for weeks.
CME December hogs, the most active contract, declined 0.975 cents to settle at 56.575 cents per pound, declining for the second straight session.
Thinly traded October hogs were 0.300 cent higher to 68.750 cents per pound. The front-month contract finished just below its roughly seven-month high notched on Monday.
Strong cash hog prices and an increased U.S. hog slaughter have bolstered hog futures in the near-term even as an outlook for increased supplies pressured deferred contracts. The October-December hog spread 1LHV8-Z8 at an October premium of 12.175 cents was the widest in four years, Refinitiv Eikon data showed.
“It’s evident watching from October to December that traders do not expect this relative tightness in the slaughter hogs is going to last,” said independent futures trader Dan Norcini.
Hogs in the top Iowa and Minnesota cash market were up 33 cents to $65.25 per cwt, U.S. Department of Agriculture data showed, reflecting good demand from pork packers.
USDA late in September showed the total U.S. hog herd about 3 percent larger than a year ago.
“We should not be running into any shortage of hogs,” Norcini added.
Most-active CME December live cattle eased 0.825 cent to 113.350 cents per pound, declining from an earlier seven-month high of 114.475 cents.
The contract has been trading in a roughly 2-cent range since Sept. 27, with traders reconciling satisfactory cattle supplies with robust demand for beef.
USDA data on Tuesday showed U.S. beef exports in August sharply higher than a year ago.
CME November feeder cattle were down 0.925 cents to 157.500 cents per pound. Feeder steers and heifers fetched prices $3 to $5 per cwt lower than a week ago at a closely watched cash auction in Oklahoma City, USDA said.
Reporting by Michael Hirtzer; Editing by Cynthia Osterman