CHICAGO (Dow Jones)--Analysts and brokers expect a generally weak Chicago Mercantile Exchange hogs open Wednesday on potential profit-taking after Tuesday's futures rally.

Tuesday evening's $3.11 per hundredweight pork cutout collapse that took a huge chunk out of pork packer profit margins is another pressing market issue.

The Dow Jones packer margin index for Tuesday's operations was plus $5.14, compared with plus $15.40 the previous day.

And bullish players are concerned that daily hog slaughter return around 430,000 head will again drag on wholesale pork demand and pressure near-term cash hog prices.

Also, October's Relative Strength Index shows that the contract is mildly overbought which may limit possible buying interest.

However, mostly steady-to-firm cash hog price calls for Wednesday is a market plus. Furthermore, spot-October and nearby-December are nearly in line or at discounts to CME's hog index which might minimize potential front-month losses.

Low Labor Day holiday-week volume and traders positioning themselves for the three-day holiday weekend could make for a volatile trading session.

Also, some market participants are expected to adjust positions in preparation for the upcoming Goldman roll.

The Goldman roll consists of funds shifting some of their October long positions into December. The first of five days for the Goldman roll period will officially begin on Sept. 8 and is associated with the Standard & Poor's Goldman Sachs Commodity Index.

October 48.65-cents Tuesday low serve as a level of price support. The contract's 50.75 Aug. 5 high is a price resistance target.

December's 46.75 Aug. 26 high is a price support floor. The contract's 47.75 Aug. 25 high is a price resistance threshold.

CME bellies could begin the session mixed.

Bullish market factors include possible follow-through buying after Tuesday's limit-up move and that evening's $66 per hundredweight steady fresh belly quote.

However, potential profit-taking and sentiments that Tuesday's CME weekly belly storage result was already factored into that session's sharp rally may weigh on belly futures on Wednesday.

CME reported 2.893 million pounds of bellies were removed from exchange-approved warehouses last week, compared with 1.979 million taken out of storage last year. The exchange quoted on-hand stocks for last week at 31.085 million pounds versus 21.364 million a year ago.

At first glance, Tuesday's larger out-movement compared with a year ago would be viewed as somewhat bullish for futures, a belly market analyst said. However, judging by Tuesday's limit up session, it appears that at least a few belly traders anticipated a positive withdrawal figure.

February's 78.01-cents 10-day moving average is an area of support. The contract's 78.73 20-day moving average is a resistance obstacle.

Cattle Complex

Analysts and brokers have divergent views about CME's live cattle open due in part to potential pre-holiday position squaring.

Bullish and bearish traders eagerly await this week's cash cattle price outcome amid Tuesday's boxed beef price slippage versus still profitable but fading beef packer profit margins.

There has been no response from fed cattle packer buyers to feeders' $87 to $88 per hundredweight asking prices. The bulk of cash cattle last week moved at $85.

The USDA's Tuesday evening boxed beef item showed choice items dropped $0.79 per hundredweight, and select cuts declined another $0.40.

The latest operating margin index for beef packers was plus $30.50 per head, compared with plus $38.35 the previous day, as calculated by HedgersEdge.com.

Spot-October and December live cattle oversold Relative Strength Index conditions might attract prospective bulls. However, some fund longs may bail out of the spot month and land in December during pre-Goldman roll activity.

The CME late Tuesday reported 1 new live cattle delivery against the recently-expired August contract.

October's 86.00-cents Monday and 85.75 June 16 lows are key price support areas. The contract's 86.70 Monday high is a price resistance barrier.

December's 85.95 Dec. 15 low serves as an area of price support. The contract's 86.95 Monday and 87.17 Tuesday highs are price resistance levels.

Feeder cattle could open flat to weak on leftover selling following Tuesday's lower settlement and CME's shrinking feeder cattle index. Also, deferred-month feeder cattle are at bearish premiums to the exchange's feeder cattle index.

By the same token, potential short covering and modest front feeder contracts' discounts to CME's feeder cattle index may limit possible front-end losses. Furthermore, October's severely oversold chart condition might lure speculative buyers.

September's 96.75-cents Tuesday low is a price support point. The contract's 97.55 June 19 low is a price resistance mark.

October's 96.50 June 9 low is a price support floor. The contract's 97.10 Monday low is a price resistance ceiling.


-By Theopolis Waters; Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com