LIVESTOCK-Fund liquidation drops U.S. live cattle futures
* Disappointing cash prices exert more pressure * Feeder cattle follow lower live cattle market * Hog futures mixed; weak cash prices, spreads By Theopolis Waters CHICAGO, Feb 20 (Reuters) - Chicago Mercantile Exchange live cattle futures slumped Wednesday on active fund liquidation and disappointing preliminary cash cattle prices, analysts and traders said. "Funds, not just in the cattle but in some of the other markets, are showing an unwillingness to embrace a bullish story on commodities right now," said U.S. Commodities president Don Roose said. CME spot February live cattle closed at 125.100 cents per lb, down 1.300 cents. April ended 1.325 cents lower at 128.225 cents. Live cattle futures have transitioned from a market that was encouraged by premiums to one needing to prove that the premiums are warranted, said Roose. Futures' selloff may have prompted some feedlots to sell cattle in the cash market, offsetting expectations for steady-to-higher cash due to wintry weather in parts of the U.S. Plains. Extremely low temperatures and heavy snow typically slow the movement of livestock to market which underpins cash prices in the near term. On Wednesday, cash cattle in Texas traded at $123 per cwt, steady with last week. Cash bids elsewhere in the Plains stood at $123 against $125 or higher asking prices, feedlot sources said. Packers are pushing back against higher cash prices because of unprofitable margins and lackluster wholesale beef demand. The U.S. Department of Agriculture showed the wholesale price for choice beef on Wednesday morning at $182.91 per cwt, up 44 cents from Tuesday; select cuts slipped 4 cents to $180.84. HedgersEdge.com put the average beef packer margin for Wednesday at a negative $52.60 per head, compared with a negative $69.55 on Tuesday and a negative $73.95 on Feb. 13. CME feeder cattle closed down sharply, and earlier fell to their 3-cent daily price limit, on fund liquidation and live cattle market losses. March feeders closed down 2.450 cents per lb to 140.725 cents. April closed at 143.600 cents, 2.575 cents lower. HOGS MIXED ON SPREADS Hog futures settled mixed as lower cash hog prices pressured April futures and fueled bearish spreads, traders and analysts said. Packers cut cash hog bids to recover lost margins and drive up wholesale pork values, a trader said. USDA data showed the average price for hogs in the most-watched Iowa/Minnesota market Wednesday morning at $78.67 per cwt, down 62 cents from Tuesday. The average pork packer margin for Wednesday was at a negative $3.30 per head, compared with a negative $10 on Tuesday and a negative $9.50 on Feb. 13, according to HedgersEdge.com. Firmer corn prices prompted bearish hog spreads with the view producers may resist expanding their herds if corn prices remained relatively high, traders said. April hogs ended at 82.950 cents per lb, down 0.100 cent and June closed up 0.375 cent to 92.350 cents.
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