CHICAGO, Feb 13 (Reuters) - Chicago Mercantile Exchange livestock futures turned lower on Tuesday, on pressure from the equity markets after government data showed U.S. inflation slowed less than expected in January.
The U.S. consumer price index report reinforced expectations that the Federal Reserve will hold interest rates steady in March - which raised concerns among cattle traders that domestic consumer demand for high-priced beef may wane.
Cattle and hog futures also faced pressure from the strength of the U.S. dollar, which can make U.S. meat exports less attractive on the world market.
Cash cattle trade values are still rising, one broker said, with bids hovering in the $180 to $182 per hundredweight (cwt) range in parts of the U.S. Plains.
But beef packer margins continued to slide. Packers lost an estimated $115.70 per head on Tuesday - a bigger loss than Monday as well as the same period a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
Wholesale beef prices were also lower on Tuesday morning, with choice cuts priced at $293.25 per cwt, down 83 cents from Monday, while select cuts were 7 cents lower at $286.95 per cwt, according to U.S. Department of Agriculture data.
Expectations for a setback in wholesale prices also weighed on futures after recent gains, traders said.
"At a certain point, with the packers losing that much per head, the trade is starting to wonder if cattle futures have hit a ceiling," said Don Roose, president of Iowa-based U.S. Commodities.
Pork cut-out values and carcass prices also lowered on Tuesday morning, weighing on futures, USDA data showed.
April live cattle settled down 0.825-cent at 185.100 cents per pound. March feeder cattle settled down 0.825-cent at 248.000 cents per pound.
CME benchmark April lean hog futures settled down 0.050-cent at 81.075 cents per pound. (Reporting by P.J. Huffstutter; Editing by Tasim Zahid)
