CHICAGO, March 4 (Reuters) - Chicago Mercantile Exchange lean hog futures on Monday ended lower in the front-month contract in a setback from strong recent gains, traders said.
Deferred contracts edged higher after short covering and hopes for improving demand for U.S. pork have already pushed the market higher since the beginning of the year.
Increased slaughtering by packers signals a pick-up in demand, likely for U.S. export business, an analyst said. U.S. pork processors on Monday slaughtered an estimated 493,000 hogs, up from 492,000 hogs a week ago and 465,702 hogs a year ago, the U.S. Department of Agriculture said.
"Production has been running consistently higher in the last few weeks," Steiner Consulting Group said. "But lower supply in cold storage and robust export demand have been key to limiting spot availability."
Most-active April lean hogs settled down 1.8 cents at 86.275 cents per pound. June hogs closed 0.075 cent higher at 102.125 cents per pound after setting a contract high of 102.350 cents.
In China, the world's biggest pork consumer, the government issued new regulations to control pig production capacity after an aggressive expansion of farms over the past two years led to an oversupply. The move could reduce the size of the world's largest pig herd.
In CME cattle markets, futures declined in a retreat from rallies on Friday, traders said.
April feeder cattle fell 2.25 cents to end at 255.750 cents per pound. April live cattle settled down 1.775 cents at 186.675 cents per pound.
The USDA reported the choice boxed beef cutout at $306.30 per cwt, which was up $1.02, and the select boxed beef cutout at $295.17 per cwt, down $0.57.
(Reporting by Tom Polansek; Editing by Sherry Jacob-Phillips)
