Chicago Mercantile Exchange live cattle prices on Wednesday felt pressure from softer wholesale beef prices and concerns about a looming supply build up, traders said.
Future's steep discount to this week's expected prices for slaughter-ready, or cash, cattle limited June market losses, they said.
June live cattle closed down 0.625 cent per pound at 105.675 cents. August ended 1.100 cents lower at 103.375 cents.
Grocers resisted paying more for beef at wholesale after prices rose for six straight sessions fueled by improved spring grilling weather in the Midwest, said traders and analysts.
Retailers may soon purchase more beef at lower prices as they gear up for the U.S. Memorial Day holiday, they said.
Investors were divided about this week's potential cash price outcome given historically high packer margins and increased supplies ahead.
Packers in the U.S. Plains posted $120 per cwt bids for cash cattle that were priced at $127 to $128 in Kansas. A few cattle moved in Nebraska at $119 to $121, down from $123 to $126 there last week.
No cattle were sold at Wednesday's Fed Cattle Exchange auction.
Possible $120 to $122 cash sales could rally futures because it would confirm to some that the market may have peaked seasonally, said Top Third Ag Marketing broker Jeff French.
"We know during the next 60 or 90 days that there are going to be a tremendous amount of cattle that we have to work through. The question is what's demand going to be?," said French.
Weaker CME live cattle futures and steady-to-lower cash feeder cattle prices undercut the exchange's feeder cattle contracts.
May closed down 0.575 cent per pound at 137.150 cents.
Hogs Close Mostly Weaker
Most CME lean hog contracts finished moderately lower on profit-taking and futures' premiums to the exchange's hog index for May 7 at 63.33 cents, said traders.
Wednesday's higher cash and wholesale pork prices mitigated market losses and lifted June into bullish trading territory, they said.
May closed 0.275 cent per pound lower at 65.925 cents. Most actively traded June ended up 0.275 cent at 76.575 cents. July closed down 0.125 cent at 77.600 cents.
Packers raised hog bids guided by increased pork demand and tight supplies as some farmers concentrate on spring planting, said traders and analysts.
Retailers are willing to feature plentiful competitively-priced pork and chicken following the recent run up in wholesale beef prices, they said.