LIVESTOCK-CME hog futures climb to two-week high as market continues recovery

By Tom Polansek

CHICAGO, Feb 25 (Reuters) - Chicago Mercantile Exchange lean hog futures touched their highest level in more than two weeks on Wednesday as the market continued to recover from a steep slide this month.

Fund buying supported gains after profit taking and long liquidation recently pressured prices, traders said.

CME April hogs LHJ26 closed up 0.4 cent at 96.200 cents per pound and reached their highest level since February 10.

On February 4, the contract set a high of 99.800 cents and then sank about 8.7% over the next seven trading sessions. Prices neared a one-month low on February 13 and have since rebounded 5.6%.

There was not a big driver for the sell off, aside from the market being overbought, said Matt Wiegand, commodity broker for risk management firm FuturesOne in Nebraska.

Uncertainty about U.S. production, along with firm cash prices, have helped prices recover, analysts said.

Average hog weights dropped to 291.4 pounds in the week ended February 21 from 292 pounds a week earlier, according to U.S. Department of Agriculture data. The agency separately quoted the wholesale pork carcass cutout at $97.62 per hundredweight, up $0.67.

For boxed beef, the USDA reported that values for choice cuts rose by $1.80 to $379.23 per hundredweight, while select cuts increased by $1.06 to $367.07 per hundredweight.

Boxed beef values also climbed on Tuesday, boosting cattle futures, analysts said.

"We've seen the boxed beef run up," Wiegand noted, adding that volumes were not huge.

CME April live cattle futures LCJ26 closed 1.175 cents higher at 240.275 cents per pound. April feeder cattle FCJ26 jumped 1.825 cents to finish at 364.025 cents per pound.

Nationwide, cattle inventories dwindled to a 75-year low as high prices and a persistent drought drove ranchers to send more animals to slaughter, instead of keeping them for breeding.

Meatpackers were losing an estimated $269.25 per head of cattle that they slaughtered, advisory service HedgersEdge said. That compared to losses of $334.90 on Tuesday.