Lean hog futures were also mixed Monday as traders weighed a big discount to cash prices against emerging signs that supplies will grow sharply this autumn.
October hog futures rose 0.5 cents, or 0.6%, to 89.97 cents a pound in trading at the Chicago Mercantile Exchange. CME December hogs fell 0.4 cents, or 0.5%, to 85.8 cents a pound.
The Chinese government, whose statements many traders view with skepticism, said Monday its population of hogs grew 1.1% in July. The government also said there's a looming risk of a pork glut, even though pork prices there have risen more than 50% since the middle of last year. China has been grappling with runaway food-cost inflation as higher-paid urban workers increasingly take to more expensive foods.
Brokers say the average size of slaughter-ready hogs is again on the rise after it fell sharply in July and August during a prolonged heat wave across the Midwest. Hot, humid temperatures make it more difficult for hogs to gain weight, which in turn results in lower supplies as slimmer animals at slaughter translate to less pork produced per animal.
October futures found support from its deep discount to current cash prices, which are about 17 cents higher than October contracts, which expire Oct. 14. Cash prices and futures typically converge as a contract nears expiration.
Cash hog prices were reported steady to weaker amid expectations for a gradual increase in supplies through late summer and into fall. Last year, non-holiday weekly average slaughter rates rose form 1.979 million in June-July to 2.053 million in August and 2.173 million in September.
The terminal markets traded steady to as much as $2 per hundredweight lower on a live basis with top prices from $69.50 to $73 per hundredweight on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Friday rose 42 cents to $109.85 a hundred pounds following.