November 20, 2018 / 8:29 PM / 19 days ago

LIVESTOCK-Hog futures fall after contract highs on profit-taking

    By Michael Hirtzer
    CHICAGO, Nov 20 (Reuters) - Chicago Mercantile Exchange lean
hog futures         tumbled 3 percent on Tuesday, reversing
after hitting contract highs as investors locked in profits
ahead of Thursday's U.S. Thanksgiving Day holiday, traders said.
    Hog futures had gained in eight out of the past nine
sessions on hopes of stronger pork demand, especially in export
markets as the African swine fever virus forced farmers to cull
hog herds in top producer and consumer China.
    But domestic demand for pork typically slows around this
time of year. Many retailers have purchased the meat they intend
to sell during the holiday season, limiting new orders.
    An increased U.S. hog slaughter also pointed to abundant
pork supplies. Late-morning U.S. Department of Agriculture data
showed wholesale pork prices, known as the cutout, down $2.37 to
$66.44 per cwt.         
    "Midday cutouts were a big factor in the decline (in hog
futures)," said Midwest Marketing Solutions analyst Brian Hoops.
    "We are going into a period of seasonal weakness ...
consumers will be stocking up on meat; end users will not,"
Hoops added.
    CME February lean hogs         settled down 1.900 cents at
67.125 cents per pound, off their earlier lifetime peak of
69.500 cents.
    Global Commodities Analytics analyst Mike Zuzolo said some
traders were unwinding long hog-short soybean spreads. Soybean
futures had been sharply lower on Monday, before rising on
Tuesday.
    "I think we are unwinding spreads ahead of the holiday,"
Zuzolo said.
    
    USDA DATA AWAITED
    Cattle futures were mostly lower, pressured in part by
expectations that a USDA report due on Wednesday will show
larger amounts of the animals in U.S. feedlots as of Nov. 1. 
    CME February cattle futures         were down 0.275 cent to
119.725 cents per pound and January feeder cattle         were
down 0.400 cent to 146.875 cents.
    "Nobody wants to take a lot of positions until they see what
that report has to say," Hoops said.
    USDA will release monthly Cattle on Feed and Cold Storage
data during the trading session on Wednesday. Analysts polled by
Reuters expected USDA to estimate on-feed supplies at 104.4
percent of a year ago.             
    A few analysts estimated pork supplies in cold storage of
573.4 million pounds, which would be down from 598.4 million
pounds a year ago. Beef supplies were estimated at 512.7 million
pounds, which would be up from 507.0 million pounds last year.

 (Reporting by Michael Hirtzer
Editing by James Dalgleish)
  
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