CHICAGO (Dow Jones)--U.S. lean hog futures were mixed to mostly lower Thursday as traders repositioned books and took profits after a week-long rally on seasonal rise in demand.

October hog contracts fell 0.525 cent, or 0.6%, to 88.475 cents a pound in trading at the Chicago Mercantile Exchange. CME December hogs traded lower by 0.6 cent, or 0.7%, to 83.80 cents a pound.

The complex took a pause from a seasonal days-long rally as demand from meat packers swelled and pork prices continued to rise. Processors will likely slaughter nearly 5% more hogs this week, as compared to the same time last year. This week's total slaughter rate is expected to be near 2.275 million, about 4.8% above the year-ago figure.

Traders increasingly say the higher pork prices and stiff demand from packers points to an uptick in pork buying by China. The giant Asian nation has been grappling with runaway pork prices for more than a year as its growing middle class of workers takes to higher-priced foods.

And yet, the recent rise in prices also fits with historical patterns. Hog prices typically fall at the end of summer as producers turn up production seasonally, then temporarily rebound after Labor Day as consumers grill more meat and retailers stock cases.

"This is not so unusual," said Don Roose, president of brokerage U.S. Commodities Inc. "Seasonally, they usually do go up" around this time of year, he said.

In late September or October, prices usually fall once more as producers climb toward peak seasonal production.


Cash hog prices are expected steady to as much as $1 higher in some regions as processors haven't finished buying supplies for weekend slaughter. Other plants have been seeking additional supplies to add to their inventories for next week's slaughter.

Saturday's slaughter is likely to be about 162,000 head.

The latest Dow Jones Newswires pork packer margin index was plus $9.44 per head, compared with plus $11.34 the previous day.

The USDA's pork carcass composite value Wednesday fell 50 cents to $95.22 a hundred pounds.

The terminal markets are expected to trade mostly steady to possibly firm at some locations with tops seen from $54 to $64 a hundred pounds.