CHICAGO: Chicago Mercantile Exchange cattle and hog futures were sharply lower in electronic trading early on Tuesday as investors either exited the markets or added short positions as Japan's nuclear reactor crisis continued, traders said.
A sharply lower stock market also pressured.
Open interest in cattle increased nearly 6,500 contracts as traders added short positions during Monday's lower market.
In hogs, open interest declined 2,721 contracts after Monday's lower market, indicating long liquidation.
Japan is a leading buyer of US beef and pork.
LIVE CATTLE - At 8:30 a.m. CST (1430 GMT), April cattle down 1.650 cents, or 1.42 percent, at 114.850 cents per lb and June cattle down 1.825 cents, or 1.56 percent, at 114.825.
* Investors added short positions in cattle on Monday amid worries damage to Japan's economy and nuclear plants will slow imports.
* Japan was the No. 3 export market for US beef in 2010,taking 15 percent of US beef exports.
* While demand for beef may increase once Japan recovers, investors expect a slowdown in business as damage is assessed.
* USDA on Monday put choice beef cutout at $184.97 per cwt, up $3.51 from Friday and the highest since 2003.
* Beef plants have had to raise beef prices to cover the cost of record high cattle.
* Open interest up 6,453 at 374,596. after Monday's lower market. April's was down 4,224 at 74,179, while June's increased by 7,597 to 161,602.
FEEDER CATTLE - March down 1.425 cents, or 1.09 percent, at 129.475 cents per lb and April down 1.675 cents, or 1.25 percent, at 131.975.
* Pressure for lower cattle futures and stock market.
* CME's latest feeder cattle index up 0.30 cent at 129.55 cents per lb.
* Corn futures called 15 to 20 cents per bushel lower as devastation in Japan could slow sales there.
* Open interest down 423 at 48,235 after Monday's lower market.
LEAN HOGS - Steady to 0.200 cent per lb lower.
* Sharply lower cash hog markets on Monday and worries about Japanese demand for pork weighed.
* In 2010, Japan was the top importer of US pork taking 1.285 billion lbs, or about 30 percent of US pork exports.
* Average pork price on Monday was up 69 cents at $91.88 per cwt, according to USDA.
* Latest CME lean hog index down 0.37 cent at 85.47 cents per lb.
* Open interest down 2,721 at 227,702 after Monday's lower market.
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