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LIVESTOCK-CME hog futures slip on weaker cash; live cattle mostly firm

By Mark Weinraub CHICAGO, Jan 11 (Reuters) - Chicago Mercantile Exchange (CME) lean hog futures closed lower on Friday, following softening cash hog prices, traders said. CME February hog futures settled down 1.425 cents at 62.650 cents per pound, halting a three-session advance. Traders noted that hogs in the top cash market of Iowa and southern Minnesota traded at an average price of $50.73 per cwt, down from $51.10 a day earlier, according to the U.S. Department of Agriculture. "The (futures) market is still carrying a premium to cash. Today and yesterday, we (had) a little bit of a lower cash market. So some of that bullish enthusiasm got sucked out," said Top Third Ag Marketing analyst Craig VanDyke. CME live cattle futures traded mostly higher on technical buying and anticipation of higher cash cattle trade compared to a week ago, brokers said. After the close, cash cattle traded in Kansas and Nebraska at $124 per cwt, up $1 from last week. Packers and cattle feeders were still in a stand-off at the closing bell, a factor that seemed to favor the feedyards, VanDyke said. "To me, that says maybe the yards have a little bit of leverage. So they could, at a minimum, be looking at steady cash trade," he said. CME February live cattle settled 0.100 cent higher at 124.975 cents per pound, after notching a contract high at 125.650 cents. However, CME March feeder cattle fell 0.175 cent at 144.900 cents per pound. The thinly traded January contract also declined, closing down 0.625 cent at 146.125 cents per pound. Trading volume in cattle futures was heavy this week due in part to commodity index funds rebalancing their portfolios, an annual five-session process that began Jan. 8. Traders had expected that the funds would sell roughly 7,000 live cattle futures and 6,000 lean hog futures over the course of the rebalance, and buy about 1,000 feeder cattle futures. (Reporting by Julie Ingwersen Editing by James Dalgleish)

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