CHICAGO, July 25 (Reuters) - Chicago Mercantile Exchange (CME) livestock futures had a mixed day of trading on Thursday as a dearth of cash trade fueled more selling of nearby live cattle contracts and buying of the deferred months, traders said.
The recent rally on hog futures continued to cool, as the market corrected after a lack of new export sales news from the U.S. Department of Agriculture.
Hog futures have surged in recent weeks due largely to the livestock market’s expectations for increased demand for U.S. pork from China, the world’s top importer, traders said.
“The export numbers from USDA were good - with over 9,000 tonnes - but there weren’t any new sales that were booked,” said Dan Norcini, an independent livestock trader. “At this point, people are becoming really skeptical and wondering when China is going to start buying.”
Norcini said hog futures prices could slip further if there continues to be a lack of new sales from China in the coming weeks.
Late Thursday, Bloomberg reported that China will allow some tariff-free purchases of U.S. cotton and corn.
But some traders were wary of banking on such news.
“It’s a show-me attitude now, not a tell-me attitude,” Norcini said. “This market is counting on China to come in and gobble the big volume of pork we’re going to have toward the end of the year. Because if they don’t, who will?”
Meanwhile, a lack of buying from beef packers in the cash market left cattle futures waffling on Thursday, with the deferred contracts inching upward in response to the corn market.
Chicago Board of Trade (CBOT) soybean and corn futures both dipped Thursday after the U.S. Department of Agriculture (USDA) released a weekly export sales report that disappointed analysts.
CME August lean hog futures closed the day down 0.600 cent at 85.950 cents per pound, while October hogs settled down 2.200 cents at 78.650 cents.
CME August live cattle futures closed down 0.250 cent at 108.650 cents per pound. CME October cattle ended unchanged at 109.900 cents per pound.
CME August feeder cattle futures settled down 0.025 cent at 142.800 cents per pound while September feeders edged up 0.350 cent to 143.225 cents per pound. (Reporting by P.J. Huffstutter in Chicago Editing by Tom Brown)