U.S. hog futures posted their biggest daily loss in 4 1/2 weeks, pounded by lower cash hog prices and by Wall Street's tumble amid fading optimism the euro zone crisis will be resolved this week.
Dow Jones industrials retreated on word that the European Central Bank may not aggressively ratchet up government bond purchases to help contain the debt crisis -- which pumped up the dollar.
Hog market investors were rattled by lower cash hog prices as pork processors work through abundant hog supplies while waiting for retail and export business to return after the Thanksgiving holiday.
Liquidation of spot-December hog futures ahead of their Dec. 14 expiration dropped the contract to its lowest in 2 1/2 months.
Declines also put December at a bullish discount to CME's latest lean hog index at 86.34 cents. December hogs on Thursday closed 1.175 cents per lb lower at 84.825 cents.
Most-actively traded February sank to its lowest point in nearly a month after it breached the 88.17-cent 200-day moving average support level.
February ended down 1.550 cents per lb at 87.250 cents.
CATTLE MIXED, CASH TRADING AWAITED
CME cattle settled mixed as traders watched U.S. stocks futures slump while they waited for this week's cash cattle trade.
Plains cattle were bid at $118 per cwt against $121 to $125 asking prices. No trades were reported as of Thursday.
Cattle futures chopped around throughout the morning. The market was supported at times by futures' discount to last week's cash cattle sales, while being pressured by outside markets.
``Cattle held their own for most of the day. That tells me they separated from the stock market long enough to search for market fundamentals,'' a CME cattle trader said.
Futures priced in a possibly lower cash cattle trade due to poor margins and inconsistent domestic beef demand.
Thursday afternoon's wholesale beef choice cuts plummeted $4.44 per cwt to $186.45 and select tumbled $2.09 to $171.62, according to USDA.
Thursday's beef packer margins were estimated at a negative $72.50 per head, compared with a negative $92.35 on Wednesday, according to HedgersEdge.com.
December live cattle closed up 0.275 cent per lb at 119.425 cents. February finished down 0.175 cent at 119.600 cents. (Reporting by Theopolis Waters; editing by Bob Burgdorfer)