December 18, 2018 / 10:26 PM / 6 months ago

LIVESTOCK-Hog futures slump on technical selling, weak cash market

    By Karl Plume
    CHICAGO, Dec 18 (Reuters) - Chicago Mercantile Exchange lean
hog futures         fell for a fourth consecutive session on
Tuesday led by the actively traded February contract, which hit
a 4-1/2-week low on pressure from its premium over cash hog
prices.
    Ample hog and pork supplies weighed on nearby futures
contracts, while losses in deferred months were less severe as
investors anticipated improved export demand from China, where
the domestic hog herd has been hard hit by African swine fever.
    A new case of the disease was confirmed on Tuesday, bringing
the total of affected farms to about 90.             
    The chief executive of major meat packer JBS SA           
said the outbreak may benefit exporters in the United States and
Brazil.             
    But China has thus far bought only modest amounts of U.S.
pork as tariffs enacted by Beijing in response to U.S. duties on
Chinese products remain in effect.
    "All the African swine fever headlines have been traded.
They're still a fantasy. We haven't seen the really big (export)
numbers yet, just a few sales," said Craig VanDyke, analyst with
Top Third Ag Marketing.
    The most active CME February hog futures contract        
fell 1.175 cents to 62.650 cents per pound, breaking through
chart support at its 100- and 200-day moving averages. The
cash-settled contract remains at a large premium to the latest
CME lean hog index        of 55.13 cents.
    "The hog market has carried a premium to cash for a while
and with the December contract going off the board last week,
we're just narrowing that spread," VanDyke said.
    Positioning ahead of Thursday's U.S. Department of
Agriculture quarterly hogs and pigs report also weighed on
futures. Analysts surveyed ahead of the report said, on average,
that the U.S. hog herd expanded by 2.7 percent in the
September-December quarter.             
    Live cattle futures rebounded on Tuesday after three days of
declines, underpinned by firm cash cattle markets and higher
beef prices.
    CME February live cattle         rose 1.025 cents and
settled at 122.575 cents per pound, holding support at its 20-
and 50 day moving averages. CME January feeder cattle futures
        were up 0.825 cent at 146.200 cents.

 (Reporting by Karl Plume
Editing by James Dalgleish)
  
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