CHICAGO, Dec 24 (Reuters) - U.S. livestock futures traded relatively thinly on Tuesday ahead of the Christmas holiday, but there were some erratic moves in hog futures following a report on the size of the U.S. hog herd, traders said.
Lean hog futures found a few buyers after the U.S. Department of Agriculture’s quarterly Hogs and Pigs report showed the herd size was higher than many traders had expected.
But the report, released on Monday after the market had closed, also said there was a smaller-than expected supply of lighter-weight hogs, which some traders on Tuesday viewed as supportive for spring hog futures.
Yet the inventory of 120-pound to 180-pound hogs was still well above year-ago levels - which suggests that supplies will continue to run signiﬁcantly above year-ago levels into early 2020, said Dan Norcini, an independent trader.
“The wild card in all this is now Chinese demand,” Norcini said. “Will they finally start buying large amounts of U.S. pork?”
Chicago Mercantile Exchange’s most actively traded February lean hog futures ended the day up 0.450 cent, closing at 70.700 cents per pound.
Trade in livestock futures closed early on Tuesday, at 12:15 p.m. CST (1815 GMT), and will remain closed on Wednesday in observance of Christmas. Trade resumes Thursday at 8:30 a.m. CST (1430 GMT).
U.S. cattle futures continued to face light pressure following Friday’s bearish USDA cattle-on-feed report, traders said.
The USDA on Friday said 2.09 million head of cattle were placed in feedlots in November, up 4.9% from a year earlier. Analysts surveyed by Reuters were expecting a 1.1% increase.
Both live and feeder cattle markets are expected to see lower slaughter numbers until January, which will tighten up supplies going into 2020.
“Consumer demand is generally focused on Christmas hams this week, before shifting more toward the beef sector early next month,” Arlan Suderman, INTL FCStone chief commodities economist, said in a client note.
Consumers tend to focus more on buying and eating pork and poultry products during the Thanksgiving and Christmas holiday seasons, livestock analysts said.
CME’s most actively traded February live cattle futures inched up 0.150 cent at 125.825 cents per pound. January feeder cattle futures ended up 0.050 cent at 143.575 cents per pound. (Reporting by P.J. Huffstutter; Editing by Dan Grebler)
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