CHICAGO (Dow Jones)--Chicago Mercantile Exchange hogs settled lower Wednesday on profit taking, bearish fundamentals and sell stops.

Most live cattle contracts closed higher. Pork bellies ended in bullish territory. Feeder cattle finished up sharply.

Lean hogs sank from the outset after short-term longs pocketed profits following futures' steep climb on Tuesday. That evening's deep pork cutout price cut eroded pork packer profit margins.

Initial steady-to-higher cash hog prices turned sour as the sluggish holiday-week market wore on.

October selling increased amid pre-Goldman roll pressure.

The roll refers to funds shifting some of their spot-October long positions into December. The first of five days for the official start of the roll will begin on Sept. 8 and is tied to the Standard & Poor's Commodity Index.

December hogs briefly slipped beneath 10-day moving average support before speculative buyers pulled the contract up from morning lows.

Meanwhile, lack of U.S. stock market leadership and languid Chicago Board of Trade corn leaned on deferred hog months.

Floor traders foresee steady-to-lower cash hog bids for Thursday. Processors look to recoup recent margin losses while curtailing operations in advance of Monday's Labor Day holiday.

More traders on Thursday are expected to settle their business affairs before the three-day holiday weekend. Additional pre-Goldman roll activity is seen for Thursday.

Pork bellies closed higher on short covering, fresh belly's steady midday quote and buy stops. Traders also implemented February/May forward spreads.

October hogs ended 67 points lower at 48.82 cents a pound, and December closed down 62 points at 46.85 cents.

February bellies closed 75 points higher at 79.00 cents a pound. March was unquoted. May ended 50 points higher at 80.50 cents.

Cattle Complex

CME live cattle closed higher on short covering, buy stops and cash cattle price confidence that drove October/December bull spreads.

Live cattle flip-flopped throughout the morning buffeted by short covering that clashed with nervous cash cattle-connected selling into upswings.

Packer buyer cash-basis fed cattle bids cropped up at $82 per hundredweight in response to $87 to $88 asking prices. Fed cattle last week brought generally $85.

Spot-October and nearby-December oversold chart conditions and deteriorating but still profitable beef packer profit margins attracted prospective buyers.

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.

However, futures eased from highs due to directionless U.S. equities, uninspiring CBOT corn and sagging boxed beef prices.

The USDA's Wednesday afternoon boxed beef item showed choice items down 71 cents per hundredweight, and select cuts slipped 26 cents.

Live cattle traders on Thursday will watch for further cash cattle price developments, square positions before the long holiday weekend and possibly conduct pre-Goldman roll transactions.

Feeder cattle closed sharply higher on short covering, buy stops and October's oversold chart condition. Front-month feeders' slight discounts to CME's feeder cattle index and October/January bull spreads contributed to advances.

October live cattle closed 67 points higher at 86.77 cents a pound and rebounded from an earlier 2 1/2-month low.

December live cattle finished up 37 points at 86.80 cents. The contract recovered after it initially sank to a 9-month bottom.

September feeder cattle settled 160 points higher at 98.60 cents, and October ended 170 points higher at 98.50 cents.

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