Hog futures traded sideways on lower cash-market and pork prices.
Pork prices were sharply lower Thursday, falling 1.17 cents to $98.84 a pound as of midday and were led by the sliding cost of pork bellies. Pork has stayed above $1 a pound in July, with pork bellies trading at record highs. A pound of pork belly was down over 3 cents to $2.1167 at midday.
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That had traders cautious about longer-term support for hog futures. Some analysts say high pork belly prices are one of the few bright spots in a market otherwise facing growing supplies. That means a peak in demand for bellies, used to make bacon, could leave hog futures vulnerable to a correction.
"They're trading on the defensive because we know that the bellies are going down hard," said Jim Clarkson, an analyst at A&A Trading Inc. at the Chicago Board of Trade.
Lean hog futures at the Chicago Mercantile Exchange were mixed, with the front-month August contract recovering from early losses to close 0.3% higher at 82.25 cents a pound. Most contracts for deferred delivery were lower.
Cattle futures reversed course to close mostly higher, with feeder cattle making the largest gains. CME August feeders rose 0.9% to $1.47825 a pound, while August live cattle closed steady at $1.143 a pound.
The USDA said meatpackers bought some 45,000 head of cattle across the country on Wednesday, with trade more widespread than initially thought. Cattle sold for $1.17 a pound live and $1.188 a pound dressed. Traders were watching on Thursday morning to see whether prices in follow-up trade would be steady or higher.
China temporarily halted some Australian meat imports, Australian officials said Thursday, though analysts said the global price impact was likely to be limited.
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(END) Dow Jones Newswires
July 27, 2017 15:17 ET (19:17 GMT)