CHICAGO, Aug 16 (Reuters) - Chicago Mercantile Exchange live cattle futures stumbled to their lowest level in more than two weeks on Wednesday, while lean hogs hit their lowest price since June.
Drought prompted U.S. cattle producers to reduce their herds since last year by driving up feed costs and reducing the amount of pasture available for grazing.
Still, fund selling hung over futures, brokers said.
"Cattle are sluggish," said Dennis Smith, commodity broker for Archer Financial Services. "We're just still in a summer liquidation mode."
Most-active October live cattle weakened 0.700 cent to close at 179.275 cents per pound and hit its lowest price since July 31. September feeder cattle dipped 0.775 cent to 249 cents per pound.
Brokers said they expect futures to regain strength due to tight cattle supplies, which have also driven up beef prices.
Choice cuts of boxed beef on Wednesday rose by $1.73 to $308.99 per hundredweight, and select cuts of boxed beef increased by $1.74 to 284.77 per hundredweight, the U.S. Department of Agriculture (USDA) said.
"The key is the beef and the beef is bottoming out," Smith said.
Meat packers lost an estimated $38.75 for each head of cattle they processed, compared with losses of $54.45 per head on Tuesday and of $73.15 a week ago, HedgersEdge.com said.
Packers slaughtered an estimated 123,000 cattle, compared with 122,000 cattle on Tuesday and 127,000 cattle a year ago, according to the government. They also slaughtered an estimated 471,000 hogs, compared with 468,000 hogs a week ago and 482,000 hogs last year.
In the lean hog market, most-active October futures finished down 0.025 cent at 78.175 cents per pound and touched their lowest price since June 30. The contract has already dropped 10% this month.
The USDA quoted the wholesale pork carcass cutout at $107.27 per cwt, down $1.36 from Tuesday. Cutout values fell $2.72 for pork bellies and $2.56 for hams.
(Reporting by Tom Polansek; Editing by Shilpi Majumdar)
