LIVESTOCK-CME hog futures rise on disease issues, pork demand

By Julie Ingwersen

CHICAGO, Jan 15 (Reuters) - Benchmark lean hog futures on the Chicago Mercantile Exchange (CME) reached their highest level since October on Thursday and contracts for deferred delivery set life-of-contract highs, buoyed by brisk demand for pork and threats to production from hog diseases, analysts said.

Front-month February hog futures LHG26 settled up 2.100 cents at 87.800 cents per pound after reaching 87.900 cents, the contract's highest since October 9. April LHJ26, June LHM26 and July LHN26 hogs set contract highs.

Diseases circulating in U.S. hog operations threaten to curb pork production, said Don Roose, president of Iowa-based U.S. Commodities, even though the U.S. Department of Agriculture in a quarterly report last month said the U.S. hog herd was 1% larger than a year earlier.

"The hog market continues to be focused on disease issues.... While you talk about bigger (herd) numbers, the disease problems are the great equalizer," Roose said.

Meanwhile, demand for U.S. pork has been decent domestically and in the export market, Roose said, noting that dietary guidelines released this month by the administration of U.S. President Donald Trump recommended that Americans eat more protein.

The U.S. Department of Agriculture reported export sales of U.S. pork in the week to Jan. 8 at 26,800 metric tons, with Mexico the top buyer of 9,200 tons. EXP/PRK

The USDA priced pork carcasses on Thursday at $93.60 per hundredweight, up $2.31 from Wednesday.

In the cattle markets, CME feeder cattle futures hit their highest since October, while live cattle futures firmed in range-bound trade.

Feeder cattle supplies remain tight given the ongoing U.S. suspension of cattle imports from Mexico due to the spread of New World screwworm, a parasite, south of the border.

CME March feeder cattle futures FCH26 settled up 4.850 cents at 364.550 cents per pound after reaching 364.675 cents, a multi-month high. February live cattle futures LCG26 ended up 0.900 cent at 236.050 cents per pound, but stayed inside of Wednesday's trading range.