Chicago | Reuters — Chicago Mercantile Exchange (CME) hog futures fell to a five-month low on Thursday, pressured by big supplies that overwhelmed any optimism about news that China made its biggest purchases of U.S. pork in seven weeks, traders said.
The world’s largest pork consumer bought 10,211 tonnes of U.S. pork between Aug. 2-8 for shipment in 2019 as a highly contagious swine disease ravages the Chinese hog herd.
Traders labeled the size of the purchase as routine.
“Hopes of demand are getting outweighed by the record supplies,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “We need big buying to overcome this big supplies.”
Cattle contracts closed mostly higher, supported by strong packer margins.
But the gains were limited by expectations of slaughter being limited in the coming month because of last week’s fire at a Tyson Foods packing plant in Kansas.
Roose said that the market was debating how long the plant would be shuttered, with trade guesses ranging from two months to six months.
The cattle market was seen as technically oversold, which attracted some buying on Thursday.
CME August October live cattle ended 0.025 cent higher at 98.525 cents (all figures US$). December and February cattle contracts were slightly lower but other deferred contracts settled in positive territory.
CME September feeder cattle futures were 0.475 cents higher at 133.3 cents/lb.
CME October hogs ended the day down 1.775 cents at 65 cents/lb.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.