CHICAGO (Dow Jones)--Potential profit-taking after Wednesday's futures gains and negative market fundamentals might produce a mostly weak Chicago Mercantile Exchange hogs open Thursday, according to analysts and brokers.

Pork cutout values late Wednesday dropped another $0.30 per hundredweight, which weighs on pork packer margins and may undercut cash hog prices.

The Dow Jones packer margin index for Wednesday's operations was minus $0.48, compared with minus $0.46 the previous day.

Bullish traders continue to have a hard time rationalizing buying December because of its disconnect to current market fundamentals.

Spot-December and nearby-February are at bearish premiums to CME's hog index. And both contracts are technically overbought based on their Relative Strength Index conditions.

Also, a few market longs may exercise caution before the U.S. Department of Agriculture's monthly cold storage report that will be released on Thursday at 3 p.m. EDT.

Analysts' average projection for U.S. belly stocks for September is 38.9 million pounds based on a narrow 38 million to 39.84 million pound range. Ham inventory last month was estimated at 137.6 million pounds. And total amount of pork in the nation's warehouses for September was projected at around 528.3 million pounds.

Nonetheless, recent hog weight declines might stir buying on possible breaks because it suggests tighter supplies ahead.

December's 52.87-cents 100-day moving average serves as an area of support. The contract is set to challenge 53.72 10-day moving average resistance.

Also, December's 54.50 Oct. 14 high is an area of price resistance.

February's 60.06 10-day moving average is a support area. The contract's 60.75 Wednesday high is a price resistance target.

Pork bellies could open mixed.

Follow-through buying after futures' upturn Wednesday and that evening's steady fresh belly quote at $68 per hundredweight are bullish market features.

Potential profit-taking and caution before the federal government's monthly cold storage numbers might become bearish belly futures issues.

February's 80.25-cents Oct. 5 high is a price support floor. The contract's 81.96 20-day and 82.23 40-day moving averages are chart resistance thresholds.


Cattle Complex

A generally weak CME live cattle open is possible Thursday on potential profit-taking and market bulls playing it close to the vest while awaiting word regarding the trade of unsold cattle this week.

Cash-basis fed cattle so far this week moved at $84 to $85 per hundredweight, compared with up to $84 last week. Feeders are standing pat with asking prices at $86 to $87.

Spot-October and nearby-December are overbought chartwise. And, beef packer profit margins were hit hard after processors paid more for supplies this week than a week ago.

The latest operating margin index for beef packers was minus $4.15 per head, compared with plus $14.45 the previous day, as calculated by HedgersEdge.com.

USDA's boxed beef values turned mixed late Wednesday after recently posting several days of consecutive gains.

The USDA'S Wednesday evening boxed beef data showed choice cuts down $1.08 per hundredweight, but select items were up $0.25.

Meanwhile, the U.S. dollar's early-morning rebound and Chicago Board of Trade corn softness may lean on some distant live cattle contracts.

The CME late Wednesday reported 60 new live cattle deliveries against the spot-October CME live cattle contract that will expire on Oct. 30. Wednesday evening's deliveries were received by someone who willingly took them.

October's 86.15-cents Wednesday low is a support level. The contract has a chart gap between Wednesday's 86.15 low and Tuesday's 85.00 high.

October's 85.32 40-day moving average is a technical support area that is in the middle of Wednesday's chart gap.

Also, October has price resistance at 87.25, which is the Sept. 10 low. October's 87.40 100-day moving average is also a chart resistance obstruction.

December's 86.75 Wednesday low is a price support area. The contract has a chart gap between Wednesday's 86.75 low and Tuesday's 86.57 high.

December's 87.72 100-day moving average is a resistance target.

Feeder cattle's open may vary.

Residual buying following futures' upturn Wednesday and flat-to-weak CBOT corn in overnight trading are positive market influences.

Possible profit-taking, futures' premiums to CME's slipping feeder cattle index and potential spot-October selling ahead of its Oct. 29 expiration date could become bearish market factors.

January feeder cattle are also overbought based on technical charts.

October's 94.12-cents 10-day moving average is a support floor. The contract's 94.58 20-day moving average is a resistance ceiling.

November's 95.75 Wednesday low is an area of support and that day's 96.50 high is a price resistance obstacle.


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


-By Theopolis Waters; Dow Jones Newswires; 312-559-4965; theopolis.waters@dowjones.com