U.S. live cattle futures fell on Thursday following steady to lower prices for cattle in the cash market and disappointing export data, said analysts and traders.
Investors also cited caution before the U.S. Department of Agriculture's monthly cattle-on-feed report on Friday.
Also on Friday, USDA will release its monthly cold storage data that will include total beef and pork inventories during August.
Chicago Mercantile Exchange (CME) spot October live cattle closed 0.6 cent per pound lower at 125.75 cents (all figures US$). It slipped beneath the 20-day moving average of 125.81 cents, triggering light fund liquidation.
Most-active December ended at 128.15 cents, down 0.95 cent. Fund selling surfaced after the contract dropped below the 200- and 40-day moving averages at 128.63 and 128.45 cents.
"Cash was really the catalyst and exports didn't help," a trader said.
Cash cattle in the U.S. Plains traded at $126 per hundredweight (cwt), steady to $1 lower than a week ago due to unprofitable packer margins, feedlot sources said.
Processors have already begun cutting back on slaughters to improve their bottom lines, a feedlot manager said.
HedgersEdge.com estimated the average beef packer margin for Thursday at negative $24.65 per head, compared with negative $25.30 on Wednesday and steady with $24.65 for Sept. 12.
Packers on Thursday processed 123,000 head of cattle, down 5,000 from last week and 2,000 less than a year earlier, the U.S. Department of Agriculture said.
USDA put beef export net sales at 10,900 tonnes, mostly to Mexico. That would be down 35 percent from the previous week and the smallest amount since 9,700 tonnes on March 29.
Analysts, on average, expect the government's cold storage report on Friday to show total August beef stocks at about 453 million lbs., compared with 455.7 million in July and 428.6 million during August 2011.
Feeder cattle at the CME followed the lower live cattle market.
Spot September ended 0.7 cent/lb. lower to 144.125 cents. Most-actively traded October closed at 146.725 cents, down 0.275 cent.
Spot October CME hogs closed up 0.1 cent/lb. to 74.85 cents. It was underpinned by higher cash hog and wholesale pork quotes, signaling a potential end to recent losses in both sectors, said traders and analysts.
They said spreading and profit taking pressured most-actively traded December that finished at 74.2 cents, down 0.525 cent.
The average hog price in the most-watched Iowa/Minnesota market was $69.93/cwt, $1.25 higher than on Wednesday while marking four days of advances, according to USDA.
They pegged Thursday's wholesale pork price at $77.43/cwt, up $1.89 from Wednesday.
October futures buyers also pointed to Thursday's hog slaughter decline as proof producers are current in marketing their hogs after initially culling them to fend off high feed costs.
USDA on Thursday reported 431,000 hogs were slaughtered, 2,000 fewer than a week earlier but 17,000 more compared to a year ago for the same period.
"It (slaughter) shows that the brunt of the largest slaughters is probably behind us as the initial panic shook out a lot of hogs," said independent hog futures trader Dan Norcini.
He contended that hog farmers have not finished liquidating their herds, which produced a glut of hogs and fresh pork supplies that could be reflected in the USDA cold storage report on Friday.
Analysts' average forecast for pork inventories last month was 547.3 million lbs., compared with 546.6 million in July and 442.9 million for the same period a year ago.
-- Theopolis Waters writes for Reuters from Chicago.