December 5, 2018 / 11:11 PM / 11 days ago

LIVESTOCK-CME lean hogs rebound on demand hopes, good pork margins

    By Karl Plume
    CHICAGO, Dec 5 (Reuters) - U.S. lean hog futures rebounded
on Wednesday after two sessions of declines as improving meat
packer margins and hopes for more pork sales to China buoyed the
market.
    Traders are anticipating more pork sales to China following
surprise sales to the world's largest hog and pork market last
week.
    Washington and Beijing also struck a trade war truce deal
last weekend that the White House said would feature immediate
purchases of U.S. agricultural product, which traders said could
include U.S. pork.
    China has been battling a severe outbreak of African swine
fever that has killed hundreds of hogs. Three more cases were
announced on Wednesday.             
    China expressed confidence on Wednesday that it can reach a
trade deal with the United States, but new sales of pork or
other agricultural commodities are yet to be confirmed by either
country.             
    "Right now there's just a lot of uncertainty on the China
front and that's part of the reason we're chopping around.
Overall, the strong packer margins and the expected seasonal
decrease in the hog supplies are positives," said Doug Houghton,
analyst with Brock Associates Inc.
    Chicago Mercantile Exchange February lean hogs       
settled up 1.700 cents at 67.750 cents per pound, recovering all
of the declines from the previous two sessions. April hogs
       gained 1.375 cents to 72.125 cents.
    Average pork packer margins on Wednesday expanded to $38.05
per head, up from $29.80 a week ago, according to
HedgersEdge.com.        
    Live cattle futures also advanced on technical buying and on
expectations for firm cash cattle prices at U.S. Plains feedlot
markets this week.
    Active trading has yet to develop this week at Plains fed
cattle markets, but prices are expected to be at least steady
with last week' sales at $117 to $118 per cwt.
    Harsh winter weather in the Plains has also raised some
concerns about reduced weight gain rates and difficulty moving
cattle.
    CME February live cattle futures         settled up 0.725
cents at 122.375 cents per pound, holding chart support at its
50-day moving average.
    Feeder cattle futures tracked live cattle higher, with
January futures         up 1.075 cent at 145.475 cents.

 (Reporting by Karl Plume)
  
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