U.S. cattle futures closed higher on Thursday after the government reported a jump in weekly beef exports, some of which went to Japan as the country battles radiation contamination in its locally produced beef.
Hog futures finished higher in nearby contracts, lifted by stronger cash hog and pork markets as a headline-making heatwave slowed hog marketings, traders said.
The U.S. Department of Agriculture reported 23,600 tonnes of beef were sold for export last week, the second largest this year. The number marked a gain of 38 percent from the prior week and was up 41 percent year-on-year.
A Monday USDA beef report indicated this week's exports would be large, but some traders said Thursday's number still came as a shock to some.
Of the total, Japan bought 4,200 tonnes, its largest purchase in more than a month. Japan is being shaken by revelations that radiation-contaminated beef was distributed to stores and restaurants.
"People will now think that because of that radiation problem, they will be buying U.S. beef," said Bob Short, analyst with PFG Best.
Japan has been a regular buyer of U.S. beef and in 2011 is the fourth-largest export purchaser.
Lower beef prices in a morning report trimmed futures' gains, but the large volume of sales, 274 loads versus 181 a week ago, attracted enough buying to keep the market higher.
"We had huge October/December spreading today. They are betting placements will be down more than expected," a cattle trader said.
The spreading was attributed to traders preparing for Friday's monthly feedlot cattle report, which analysts on average expect to show 2.7 percent more U.S. feedlot cattle on July 1 than a year ago but a 6.5 percent dip in placements.
Also due on Friday is the USDA's semiannual cattle inventory report, which is forecast to show a 1.3 percent smaller U.S. cattle herd. The inventory report includes beef and dairy cattle as well as cows and young calves.
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