U.S. lean hogs futures were mixed Wednesday as traders weighed record cash prices for pork against signs that China's need for pork may be slowing.
Hogs contracts for August were recently up 0.4 cent, or 0.4%, to $1.009 a pound in trading at The Chicago Mercantile Exchange. CME October hogs were down 0.5 cent, or 0.5%, to 91.2 cents a pound.
The August contract found support in record-high pork prices, which pointed to resilient demand for pork even as U.S. consumers face a summer heat wave, which can temper demand for grilling and heavier meals.
The U.S. Department of Agriculture's carcass composite value, a measure of wholesale prices, on Tuesday rose $1.03 to $101.31 a hundred pounds, a new all-time high. The U.S. pork industry continues to export about 20% more meat than last year, which has helped keep cash prices high.
Futures felt pressure Wednesday from growing concerns that China's economy may be slowing its red-hot demand for pork. Food prices in China have spiraled upward in the last year due in large part to heavy demand there for pork.
The Chinese government said Tuesday its pork prices last week fell 0.2% from a week earlier, the first week-on-week decline since April. Pork supplies there have increased slightly, and demand is weaker than before, the government said in a statement.
Cash hog prices were predicted as mostly steady to higher on continued buying interest by some processors for additional animals to complete this week's slaughter schedules.
The cash markets gained strength throughout the day Tuesday.
The USDA's national weighted average price released early Wednesday in a wrap-up of sales Tuesday showed a gain of $4.30 a hundred pounds to $100.67, highest since June 29.
The all-time high for that series was set on June 23 at $101.50 a hundred pounds.
The recent heat wave contributed to the strength in the cash hog markets, said livestock dealers and market managers. The average live weight for hogs in Iowa/southern Minnesota last week fell 2.9 pounds from the previous week and 4.7 pounds from a year ago. The USDA reported last week's average at 263.7 pounds, the lowest since early July 2009.
Analysts predict Wednesday's hog slaughter to be around 407,000.
The USDA's carcass composite value, a measure of wholesale prices, Tuesday rose $1.03 to $101.31 a hundred pounds, an all-time high.
The latest Dow Jones Newswires pork packer margin index was plus $2.34 per head, compared with plus 42 cents the previous day.
The terminal markets were expected to trade mostly steady to firm with top prices seen ranging from $65 to $72 a hundred pounds.
The latest CME two-day lean hog index, calculated using USDA market data, for Monday was up 1.17 cents to 98.67 cents a pound.