October 17, 2018 / 9:01 PM / 10 months ago

LIVESTOCK-Hog futures decline on heavier animals, technical selling

CHICAGO, Oct 17 (Reuters) - Chicago Mercantile Exchange lean hog futures dropped for the second straight session on Wednesday, on technical selling and after government data showed heavier-weight U.S. hogs that pointed to larger supplies, traders said.

Bear-spreading pressured front-month December hogs, which settled down 2.175 cents at 54.700 cents per pound, a decline of about 4 percent. February hog futures fell 2.8 percent or 1.675 cents to 62.575 cents.

Hog prices had jumped to a roughly two-week high on Monday before turning lower. That selling continued on Tuesday.

“We had a nice run-up and broke out above resistance, and then obviously failed,” said Top Third Ag Marketing analyst Craig VanDyke.

Hog weights in the top market of Iowa and southern Minnesota averaged 282.8 pounds in the week ended Oct. 13, U.S. Department of Agriculture data showed before the opening of futures trading. That was above 280.9 pounds in the previous week and 282.0 pounds a year ago.

Bigger animals boost available supplies for pork packers and can also pressure futures and cash hog prices.

CME cattle futures were mostly lower, also declining on technical selling and as traders squared positions ahead of a monthly USDA cattle supply report due on Friday.

Analysts polled by Reuters predicted a 0.1 percent rise in cattle placed on feed during September and about 6.4 percent more cattle in U.S. feedlots as of Oct. 1.

Additionally, heavy rains in the southern U.S. Plains cattle region left many feedlots muddy. Feedlot operators sometimes are reluctant to bring in animals in those conditions. A recent spike in corn futures to a two-month high also raised costs for fattening animals, limiting demand.

“We’ve seen feeder demand come off just because of how bad the conditions are,” VanDyke said of feedlots.

November feeder cattle futures fell 0.875 cents to finish at 153.350 cents per pound, the lowest since Sept. 12. CME December cattle was down 0.400 cent at 117.375 cents per pound. (Reporting by Michael Hirtzer; Editing by David Gregorio)

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