* CME live cattle gain on cash expectations
* Feeders climb as corn prices drift lower
By Theopolis Waters
CHICAGO, Aug 28 (Reuters) - Chicago Mercantile Exchange hog
futures turned lower on Wednesday as packers slashed cash bids
ahead of the Sept. 2 U.S. Labor Day holiday, traders and
The U.S. Department of Agriculture on Wednesday morning
quoted the average hog price in the most-watched Iowa/Minnesota
market $3.10 cents per hundredweight (cwt) lower from Tuesday at
Cash hog prices fell for a third straight day pressured by
the seasonal increase in supplies.
Hog farmers are sending their animals to market to avoid
lower cash prices as the Labor Day holiday approaches. And,
packing plants will be closed for Monday's holiday, limiting
their need for hogs.
Grocers cutback pork purchases for a third day in row after
covering needs for holiday grilling demand.
Wednesday morning's government data showed the wholesale
pork price, or cutout, at $96.20 per cwt. The cutout tumbled
$5.60 from Tuesday led by the $15.81 drop in prices for pork
bellies, which are made into bacon.
Pork belly values were hit hard as the summer
bacon-lettuce-tomato season winds down, said traders.
They said speculative investors sold deferred CME hog
contracts in the belief that cheaper corn will increase hog
October hogs finished 0.525 cent lower at 86.050
cents per lb while December ended down 0.400 cent to
CASH IDEAS LIFT LIVE CATTLE
CME live cattle settled moderately higher on short-covering
in anticipation of at least steady cash prices this week,
traders and analysts said.
Cash cattle bids in Texas and Kansas stood at $121 per cwt
against $125 and higher asking prices, feedlot sources said.
Last week, cash cattle traded at mostly $123 per cwt in
Texas and Kansas, and $125 in Nebraska.
Mixed to higher wholesale beef prices the past five days is
supportive for cash prices. Consistent beef demand suggests
packers are buying product beyond the Labor Day holiday.
USDA Wednesday morning reported the wholesale choice beef
price, or cutout, at $196.74 per cwt, up 65 cents from Tuesday.
Select cuts slipped 47 cents to $185.17.
Investors may buy futures if the cutout moves higher, which
increases the chances of packers paying more for cattle, Doane
Advisory Services economist Dan Vaught said.
Deferred live cattle contracts rose slightly on the prospect
that tighter cattle numbers would support cash cattle values at
Spot August live cattle ended 0.350 cent higher at
123.300 cents per lb. Most-actively traded October
closed up 0.200 cent to 126.925 cents.
Feeder cattle futures at the CME finished steady to higher.
Spot-August feeder cattle was led by the exchange's feeder
cattle index which was at 155.00 cents. That contract will
expire on Aug. 29.
Spot August feeder closed unchanged at 154.725
Firm deferred-month live cattle and weaker corn prices
boosted remaining CME feeder cattle futures.
Most-actively traded September finished 0.650 cent
higher at 155.925 cents and October at 157.625 cents,
0.675 cent higher.
(editing by Gunna Dickson)