LIVESTOCK-CME cattle futures dive on poor packer margins, lower cash prices

By Karl Plume

CHICAGO, Feb 27 (Reuters) - Chicago Mercantile Exchange cattle futures tumbled for a second straight session on Friday as deeply negative beef packer margins and lower cash cattle prices weighed on the market, analysts said.

A looming strike at a large beef plant in Greeley, Colorado, hung over the market, as a loss of production would dent demand for fed cattle. Elevated beef prices also could come under seasonal pressure, as milder weather that normally ushers in outdoor grilling season remains weeks or months away, analysts said.

"The packer has been losing a significant amount of money for quite a while," said Don Roose, president of U.S. Commodities. "And we know that it's the worst demand time of the year until we hit the grilling season."

The average beef packer margin was estimated at a negative $262.50 per head on Friday, compared with a negative $356.30 per head a week ago, according to livestock marketing advisory service HedgersEdge.

Cash cattle traded this week at prices $2 to $3 per hundredweight lower than last week as packers sought to minimize losses, analysts said.

CME April live cattle futures LCJ26 closed 4.675 cents lower on Friday at 232.225 cents per pound, a six-week low. April feeder cattle FCJ26 fell 7.550 cents to finish at 351.200 cents per pound, the lowest price since January 2.

Lean hog futures were steady to weaker on profit-taking following the market's recent rally on strong pork exports and solid domestic demand.

CME April hogs LHJ26 closed steady at 95.725 cents per pound after hitting their highest level since February 10 at midweek.