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* Position squaring before holiday as cash prices weigh * Live cattle climb Friday, up marginally for the week * Feeders gain with live cattle, down 2nd week in a row By Theopolis Waters CHICAGO, Feb 15 (Reuters) - Chicago Mercantile Exchange hog futures settled mixed on Friday as investors squared positions ahead of the three-day U.S. Presidents' Day holiday weekend. But lower cash hog values handed CME hogs their biggest weekly percent drop in 4 months at 2.5 percent. April hogs ended at 84.250 cents per lb, down 0.075 cent, after earlier drifting to a 7 1/2-month low. June bounced off a seven-month low before closing up 0.250 cent at 92.950 cents. Packers cut cash hog bids and curtailed slaughter due to unprofitable margins and tepid wholesale pork demand, said traders and analysts. The U.S. Department of Agriculture showed the average price for hogs in the most-watched Iowa/Minnesota market Friday at $81.44 per cwt, down 95 cents from Thursday and down $3.26 from a week ago. HedgersEdge.com put the average pork packer margin for Friday at a negative $12.30 head, compared with a negative $15.35 on Feb. 8. USDA estimated this week's hog slaughter at 2.145 million head, 6,000 less than during the year earlier period. Some hog processing plants will be closed on Monday for the Presidents' Day holiday, which could reduce that day's slaughter by about 50,000 head, industry sources said. LIVE CATTLE RISE BEFORE HOLIDAY Live cattle futures settled higher lifted by pre-holiday short-covering following huge losses early in the week, said traders and analysts. CME live cattle posted a marginal percentage increase for the week. Futures tumbled Tuesday and Wednesday due to fund liquidation and pressure from lower cash cattle prices. Cash cattle traded at $123 per cwt, down $2 from a week ago, said feedlot sources. Packers avoided spending more for supplies by trimming slaughter rates, which could help improve their margins and firm sagging wholesale beef values. "Everybody was off and running with the idea of tighter cattle supplies, but you still have to have somebody willing to buy beef on the other side of that equation," said Sterling Marketing president John Nalivka. USDA put the wholesale price for choice beef on Friday at $181.95 per cwt, down $1.58 from Thursday and down from the high so far this month of $184.31, according to USDA. The government estimated this week's cattle slaughter at 596,000 head of cattle, 14,000 fewer than a year ago. A few packers will be idle on Monday's holiday. Based on USDA data, an estimated 104,000 cattle were processed during last year's holiday. HedgersEdge.com put the average beef packer margin for Friday at a negative $66.90 per head, compared with a negative $61.45 on Feb. 8. Feeder cattle futures ended higher helped by short-covering and by live cattle market advances. CME feeder cattle ended 1.12 percent lower for the week and fell for a second consecutive week. March feeders closed 0.700 cent per lb higher at 143.375 cents. April closed at 146.625 cents, up 0.400 cent.