U.S. hog futures were narrowly mixed Tuesday as traders gauged a sharp pullback in wholesale pork prices against tightening supplies.

The lean-hog futures contract for June was down 0.20%, or 0.20 cent, at 89.50 cents a pound, while the July contract rose 0.25 cent, or 0.3%, to 88.0 cents a pound at the Chicago Mercantile Exchange. The July contract is currently the most-actively traded.

Hog futures have fallen steadily from all-time highs in late April but are showing signs of stabilizing. Price support is coming from expectations that cash prices for hogs can't be pushed much lower because of tightening supplies even as packers face negative margins, said Tom Cawthorne, vice president and hog-futures trader for R.J. O'Brien.

"There is some thought we may be carving out a cash bottom," he said.

Still, worries remain over demand for pork in the face of a sluggish U.S. economy. Wholesale pork prices continue to pull back, falling Monday to their lowest level since late January. The U.S. Department of Agriculture reported the pork carcass composite value, a measure of wholesale prices, was down $2.13 to $87.64 per hundred pounds. The pork carcass value hit an all-time high at $98.31 on May 16 but has fallen $10.67, or nearly 11% since.

CASH MARKETS

Early predictions for cash hog prices in the Midwest direct markets Tuesday were weak to $1 per hundred pounds lower, pressured by the decline in wholesale pork prices and thin-to-negative processing margins. Some plants have reduced their daily slaughter schedules in an effort to prop up pork prices and restore margins, said livestock dealers and analysts.

Analysts predict Tuesday's slaughter to be around 407,000 head.

The terminal markets were called steady to $1 per hundred pounds lower with top prices seen from $60 to $62 per hundred pounds on a live basis.

The latest Dow Jones Newswires pork-packer margin index was minus $2.32 per head, compared with minus $2.40 per head the previous day.

The latest CME two-day lean hog index, calculated using USDA market data, for Friday was 91.83 cents, up 0.29 cent.