Chicago Mercantile Exchange lean hog futures slipped on Tuesday, as uncertainty over Chinese pork demand continued and animal weights were expected to increase on cooling U.S. temperatures, analysts said.
Meanwhile, Chicago’s cattle futures firmed a bit on Tuesday, amid steady slaughter rates and market expectations that cash prices should continue to rise this week, traders said.
December live cattle futures settled up 1.100 cents at 129.950 cents per pound. The most-actively traded January feeder cattle contract rose 4.300 cents to settle at 157.025 cents per pound.
The U.S. Department of Agriculture said packers slaughtered 122,000 cattle on Tuesday, steady from a year earlier. The agency also reported that packers slaughtered 479,000 hogs on Tuesday, down from 491,000 hogs a year earlier.
USDA revised its Monday hog slaughter number to 472,000, down from the previously reported 481,000 hogs.
That slowdown weighed on the hog market on Tuesday, traders said, along with production and consumption uncertainty in China.
China’s huge hog sector is struggling with excess production after millions of small, often first-time, pig farmers entered the industry to capitalizes on record profits during a swine-fever related shortage.
Chinese hog prices are hovering below the cost of production and the government has been urging producers to cull their herds. At the same time, the Chinese government has told families to keep daily necessities in stock in case of emergencies.
“The question mark is if China is going to cut back on its purchasing,” said Don Roose, president of Iowa-based U.S. Commodities.
In CME lean hog futures, the benchmark December contract settled down 1.900 cents to 74.250 cents per pound. February lean hogs closed the day down 1.650 cents at 77.150 cents per pound.