LIVESTOCK-US live cattle futures drop as funds sell
* Uncertainty lends to bearish market psychology * Feeders move lower with live cattle market * Hogs mixed; higher cash expectations, spreads By Theopolis Waters CHICAGO, March 8 (Reuters) - Chicago Mercantile Exchange live cattle futures on Friday settled lower as fund liquidation dragged contracts down 1.8 pct for the week, said traders and analysts. They said uncertainty about cash cattle prices next week pressured CME live cattle futures. The potential furlough of meat inspectors, which could shut down some packing plants, kept some futures buyers on the sidelines, a trader said. And, bullish spreads at times encountered funds rolling out of the spot April contract into distant months in accordance with the Standard & Poor's Commodity Index (S&PGSCI). Funds that follow the S&PGSCI index shifted their spot long positions into June and August. Friday was the second of five days for the (S&PGSCI) roll. Investors also cited cash cattle that traded in the southern Plains at $128 per cwt, which was steady with last week. But traders had anticipated a higher cash market given strong beef demand and improved beef packer margins. HedgersEdge.com put beef packer margins at a positive $3.85 per head versus a positive $5.10 on Thursday and a negative $23.40 a week ago. U.S. Department of Agriculture data showed wholesale choice beef at $197.28 per cwt, up 38 cents from Thursday and $9.18 higher then a week ago. Feeder cattle futures followed the lower live cattle market and higher corn prices that could raise input costs for feedlots. CME feeder cattle finished 1.8 percent lower for the week. March feeders settled 1.500 cent per lb lower at 138.975 cents. April ended at 141.350 cents, down 1.275 cents. HOGS MIXED ON CASH, SPREADS CME April hogs drew support from expectations for higher cash hog and wholesale prices next week that stirred bullish spreads, said traders and analysts. They said the spreads and profit taking pressured the June contact. CME hogs settled up 1.1 percent for the week. April hogs ended at 82.025 cents per lb, up 0.225 cents. June hogs slid 0.325 cents to 91.700 cents. The average price for hogs on Friday morning in the eastern Midwest region was up 36 cents per cwt from Thursday at $74.40. But prices at the most-watched Iowa/Minnesota market late Friday tumbled $4.33 to $71.09. "There's was no shortage of hogs this week judging by slaughters that at times pulled down cash but that may not be the case next week," a trader said. Hog supplies are expected to tighten and pork demand should pick up soon as supermarkets prepare to feature product for spring grilling, he said. USDA estimated this week's hog slaughter at 2.201 million head, up 33,000 from last week and 68,000 more than a year ago.
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