CHICAGO, July 6 (Reuters) - U.S. livestock futures remained mostly sluggish on Monday at the Chicago Mercantile Exchange as traders wrestled with strengthening grain prices, tight supplies of market-ready cattle, and visions of a glut of hogs straining U.S. slaughterhouse capacity in the coming months.
Livestock futures trading was relatively light on an historic day at the CME, as traders donned their jackets to trade soybean and Eurodollar futures the old-fashioned way one last time. Monday marked the end of 167 years of open-outcry futures trading in the city where it was born.
Nearby July U.S. lean hog futures closed at a nearly one-month high, due in part to a U.S. Department of Agriculture report that the national average cash carcass value had risen 81 cents, and the composite pork cutout value was up $1.61 in midday trading, analysts said.
But some deferred hog contracts <0#LH:> eased, while live <0#LC:> and feeder <0#FC:> cattle futures also fell.
Some livestock analysts attributed part of the slump to questions about how much of the meat supply grocers such as Kroger Co sold during the Fourth of July holiday, and about how much inventory U.S. retailers are still sitting on.
"We're all waiting to see those inventory numbers come out from the retail chains," said Don Roose, president of U.S. Commodities. "When you put it out, you either sell it or smell it. You have to drop the price if it doesn't move."
Traders said they also are worried about the specter of a flood of U.S. hogs coming to market, starting this August.
The hog-herd ramp-up the industry saw late last year and this spring might challenge packers' slaughter capacity at some point, said Doug Houghton, a technical analyst at commodity marketing service The Brock Report.
"It won't be a constant pressure, and I don't think it'll be beyond the slaughter capacity," Houghton said. "But even if you see things get within 50,000 head of the U.S. capacity, it's going to be hard for the market to absorb that much product at one time."
Lean hogs on a continuous chart rose to the highest levels since June 12. Most-active August futures were up 0.050 cent at 76.425 cents per pound at 3:17 p.m. CDT (2017 GMT).
Traders nervously pointed to the beef cutout price being down sharply Monday afternoon, which raised questions about whether packers will continue to pay a premium for cattle in the coming months. After the Fourth of July, the beef sector goes into "the meat doldrums" until late July, when the school-lunch program buying starts, Roose said.
"This time of year, it's usually pretty hot, so the number of people grilling tapers back, and what people are buying to grill are hamburger and lower-priced cuts, not the high value steaks," Roose said.
August live cattle slumped 0.775 cent to close at 150.450 cents per pound and August feeders 0.575 cents to 216.875 cents per lb. (Reporting by P.J. Huffstutter; Editing by Peter Galloway)