October 3, 2018 / 10:24 PM / 8 months ago

LIVESTOCK-CME lean hog futures prices touch highest since April

CHICAGO, Oct 3 (Reuters) - Chicago Mercantile Exchange lean hog futures rose for the fourth consecutive session on Wednesday and touched their highest prices in more than five months.

CME October hogs traded up to 67.550 cents per pound, the contract’s highest price since April 20, before paring gains. It ended up 1.050 cents to 67.475 cents per pound.

Deferred contracts ended lower amid concerns about increasing supplies, traders said. December hogs slipped 2.000 cents to 57.150 cents per pound.

The U.S. Department of Agriculture said on Wednesday the average weight for hogs in the week ended Sept. 29 was 280 pounds in a reporting district that includes Iowa, southern Minnesota and South Dakota. That was down 0.7 percent from a year ago.

In recent weeks, average weights were down more than 1 percent from the previous year, and the smaller year-on-year decline fueled worries that rising hog weights would expand supplies, said Rich Nelson, chief strategist for Illinois-based broker Allendale.

“We had a little market concern about this morning’s weekly hog weight report,” he said.

Increasing supplies are a concern because China has imposed tariffs on imports of U.S. pork as part of a trade row between the world’s two largest economies. Exports of U.S. pork parts to China have declined as a result, leaving more supply on the domestic market.

In live cattle futures, prices dropped as traders booked profits after prices rose for three consecutive sessions, traders said. On Monday, December live cattle futures reached a contract high and the highest price for a front-month contract since April.

“We might have some people questioning how high these December through summer 2019 contracts need to be,” Nelson said.

Large supplies are looming over cattle markets, after U.S. ranchers expanded their herds to take advantage of low prices for feed grains and strong demand for beef.

There were 11.1 million U.S. cattle and calves being fed for slaughter as of Sept. 1, a record for that date since the USDA began tracking the data in 1996.

CME October live cattle futures settled down 0.775 cent at 113.200 cents per pound. Most active December lost 1.075 cents at 118.400 cents.

CME October feeder cattle finished down 1.200 cents at 157.875 cents per pound. (Reporting by Tom Polansek Editing by James Dalgleish)

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