CHICAGO, April 25 (Reuters) - Chicago Mercantile Exchange (CME) cattle futures turned higher on Thursday on technical trading, bouncing off the previous sessions lows in response to the U.S. government announcing plans to expand testing of dairy cows for avian influenza, market analysts said.
Meanwhile, lean hog futures turned lower amid some profit taking, and signs that index fund traders may be selling off some of their hog positions and buying up cattle contracts, said independent trader Dan Norcini.
"It's a lot of technical trading happening right now, and these markets can feed off one another," Norcini said.
Most-active CME June lean hogs settled down 2.450 cents at 105.000 cents per pound.
Actively traded CME June live cattle settled up 2.550 cents at 177.800 cents per pound. Most-active CME August feeder cattle settled up 2 cents at 258.300 cents.
Rising prices for choice cuts of beef also added support while fears over the spread of bird flu in dairy herds hung over the market, capping rallies.
The virus has not been detected in beef cattle, but traders worry the infections could threaten demand for beef along with dairy products.
Colombia has restricted the import of beef and beef products coming from U.S. states where dairy cows have tested positive for avian influenza as of April 15, according the U.S. Department of Agriculture.
It is the first country to officially limit trade in beef due to bird flu in cows, in a sign of a broadening economic impact of the virus that has restricted poultry trade globally. Colombia imports a small amount of beef from the U.S. annually, according to government data and market analysts.
"The issue will be if any other country, or countries that are serious export customers, join Colombia, then that would be a real blow to the market," said Cassie Fish, a livestock analyst and author of The Beef blog. (Reporting by P.J. Huffstutter; Editing by Alan Barona)
