CHICAGO, Dec 19 (Reuters) - U.S. hog futures strengthened on Thursday as the Agriculture Department reported that shipments of American pork to China last week reached their highest in at least 10 months.
Traders and analysts are focusing on exports to China because it is the world's top pork consumer and has lost about half its herd over the past year and a half to African swine fever, a deadly hog disease.
U.S. pork shipments totaling 15,282 tonnes in the week ended Dec. 12 were the largest to China since at least February and likely longer, data from the U.S. Department of Agriculture (USDA) showed. The agency said Chinese importers bought a net 5,940 tonnes of U.S. pork last week for shipment by the end of this year.
"It seemed like a pretty good number with two weeks left in the year," a livestock trader said of the sales.
Most actively traded February lean hog futures rose 1.075 cents to 70.975 cents per pound at the Chicago Mercantile Exchange.
Chinese buyers canceled a net 4,238 tonnes of U.S. pork that were previously purchased for 2020 shipment, according to USDA data. It was the third consecutive week of net cancellations for 2020 shipment.
"We don't want to be seeing cancellations," a broker said. "I thought it was a real disappointment to the trade, but the market is holding in there relatively strong."
In beef markets, traders began factoring in expectations for a USDA report on Friday to confirm that the number of cattle in feed lots as of Dec. 1 was bigger than a year earlier.
Analysts predict meat packers will buy fewer cattle from the lots over the next two weeks because Christmas and New Year's Day will reduce slaughtering schedules.
Processors slaughtered an estimated 121,000 cattle on Thursday, steady with a week ago and up from 117,000 a year earlier, according to USDA data.
"They're going to need to come in for buying after the holidays," a trader said.
Cash cattle traded for about $120 in Kansas, up about $1 from a week ago, traders said.
Most actively traded February live cattle futures closed down 0.500 cent at 125.625 cents per pound at the CME. The market has eased after setting contract highs of 127.9 cents earlier this week.
January feeder cattle futures rose 0.175 cent to 144.725 cents per pound.
(Reporting by Tom Polansek in Chicago; Editing by Dan Grebler)