Wires

LIVESTOCK-Lean hogs rise on short-covering, technicals after 3-day plunge

Karl Plume

CHICAGO, June 25 (Reuters) - Chicago Mercantile Exchange (CME) lean hog futures bounced on Tuesday on short-covering and technical buying following a three-session plunge that sliced prices by more than 10%, traders said.

Ample supplies of hogs and pork continued to overshadow the market, but the recent slide in futures prices had outpaced more reasoned cash hog price declines.

CME July lean hogs rose 1.550 cents to 74.400 cents per pound while actively traded August gained 1.950 cents to 76.175 cents per pound. Both hit the lowest point since August 2018 on Monday.

"The board got to a big discount to cash," said Alan Brugler, president of Brugler Marketing & Management. "We had a lot of fund liquidation selling ... and we finally reached the zero momentum point today and got a little short covering."

The latest CME lean hog index, with which July futures must converge late next month, fell 49 cents to $78.65 per cwt.

Hog traders will be monitoring news from the G20 summit in Japan later this week for any signs of a trade thaw between the Washington and Beijing.

China has stepped up pork import purchases because African swine fever has decimated its domestic herd. But U.S. pork shipments have been disappointing thus far and Beijing's steep import tariffs remain in place.

The United States hopes to relaunch trade talks after President Donald Trump and President Xi Jinping meet on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said.

U.S. pork exporters may have less competition into China as Beijing this week begins turning away any Canadian meat products, according to a media report citing a Chinese diplomat in Canada.

Live cattle futures closed higher on short-covering and technical buying, and on hopes that cash feedlot cattle in the U.S. Plains could trade this week at prices above the spot futures value.

Actively traded CME August live cattle ended up 0.825 cent at 103.250 cents per pound. Spot June futures, which expire at the end of the week, were up 0.825 cent at 107.750 cents per pound.

Light packer bids at feedlot markets were around $107 per cwt, with trading possible around $108 or $109 later this week, according to traders.

CME August feeder cattle fell 0.450 cent to 131.325 cents per pound, weighed down by rising feed prices.

"Nobody wants to own feeders if corn's going to $5 a bushel," Brugler said.

(Reporting by Karl Plume; Editing by Richard Chang)