By PJ Huffstutter
CHICAGO, August 19 (Reuters) – Chicago Mercantile Exchange lean hog futures fell on Friday, with the most active contract hitting a nearly six-week low in the session as weak export demand continued to weigh on contracts eventually, analysts said.
Meanwhile, a government report, released after the CME closed, said significantly more cattle were marketed in July than traders had expected.
The U.S. Department of Agriculture said 1.77 million head of cattle were placed on feedlots in July, up 2% from a year earlier. Analysts polled by Reuters had expected an average of 1.713 million heads.
The USDA also reported the total number of cattle fed as of August 1 at 11.2 million head, up from a year ago and above expectations. July sales of 1.83 million head, down 4% from a year ago, were in line with expectations.
Live cattle futures rose slightly on technical trade as speculators increased their net long positions in corn, analysts said.
CME October VUL2 live cattle futures rose 0.500 cents to 145.250 cents a pound, while feeder cattle futures CME September FCU2 fell 0.525 cents to 184.750 cents a pound.
In the hog sector, traders are waiting for future lean hog prices to fall as the basis spread between spot contracts and hog futures remains wide, said Don Roose, president of U.S. Commodities, based in Iowa.
On Fridays, CME August October lean pigs LHV2 fell 0.175 cents to 93.125 cents a pound.
Prices generally drop as grilling season ends and animal weight begins to increase as the weather begins to cool, Roose said.
This means the industry expects to see supply increase, even though the USDA reported this week that pork exports in the week ending August 11 were down 43% from the average of the previous 4 weeks.
“When we start harvesting and there’s this fresh supply of corn, the pigs are more interested in eating it,” Roose said.
(Reporting by PJ Huffstutter; Editing by Shailesh Kuber)
((email@example.com; 313-484-5275 (w); On Twitter @pjhuffstutter; Reuters Messaging: firstname.lastname@example.org))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.