CHICAGO (Dow Jones)--Pit-traded Chicago Mercantile Exchange hogs are seen mostly weak Wednesday due to softening market fundamentals.

Wholesale pork price's $0.73 drop Tuesday was its second consecutive pullback in a row which clipped pork packer margins and spawned steady-to-weak cash hog price calls for Wednesday.

Also, lean hog traders are keeping a close watch on the stock market that at one point Tuesday lost considerable ground in response to the European debt worries.

Global economic instability could undermine consumer confidence which might prompt shoppers to switch to cheaper alternative meat proteins in lieu of high-end pork items.

Nonetheless, June and July remain bullishly underpriced compared to CME's lean hog index which may stir downside buying into breaks.

Furthermore, June still holds a 30% Relative Strength Index chart reading. A month's RSI at 30% and below suggests it is oversold and subject to an upward adjustment soon.

Hog weights in Iowa/southern Minnesota last week averaged 270.3 pounds, up 0.2 pound from the week before and a 1.1 pounds gain versus last year.

Judging by week-over-week hog weights, producers in the upper Midwest appear to be current in marketing their hogs, which is usually supportive for cash hog prices, a CME hog trader said. But, he said, processors won't pay up for supplies as long as their margins continue to slip and pork prices fade.

Technically, June and July are above 81.22-cents and 80.91-cents 100-day moving average levels of support.

A mixed CME pork belly open is seen featuring Tuesday's $5 per hundredweight fresh belly slide to $115 versus that evening's positive CME weekly belly storage report result.

CME Tuesday reported 675,000 pounds of bellies were removed from warehouses last week, compared with a neutral storage amount last year. The exchange reported last week's belly stocks at 29.3 million pounds, compared with 64 million a year ago.

An out-movement of bellies from storage last week suggests the industry continues to experience strong bacon demand, a belly market analyst said. Also, on a five year average, he said, those who use bellies normally start taking product out of storage this time of year.

No belly deliveries were posted by CME Tuesday against the May contract ahead of its May 25th expiration date.

Cattle Complex

A lower CME live cattle start is expected as traders take a breather to consider the meaning of this week's disappointing cash cattle price results versus futures' bullish discounts to cash.

Cash-basis cattle so far this week brought $97 to mainly $98 per hundredweight, which was down $2 to $3 compared with last week. More cattle are left to sell against the backdrop of stalled wholesale beef movement and skittish outside markets.

Following the June CME live cattle 92.75-cents outcry settlement Tuesday, the exchange's electronic June cattle contract sank to a 90.90-cent low in reaction to equities' further slide tied to overseas financial unease.

Expensive beef cuts could take a hit if domestic and overseas consumers are strapped for cash because of the still fragile world economy.

Charts indicate June between 91.41-cents 100-day moving average support and 94.30 40-day moving average resistance barriers.

August's 90.25 100-day moving average serves as a support floor. The contract's 92.83 40-day moving average is a resistance threshold.

Feeder cattle at the CME will likely begin the session down slightly in sympathy with live cattle.

(To access the daily livestock market data recap report, keyword search for "Livestock Market Fundamental Data Recap")

-By Theopolis Waters; Dow Jones Newswires; 312-347-4965;