* Lower corn prices raise CME feeder cattle
* Hog futures drop with wholesale pork values
* USDA's quarterly hog report set for Friday
By Theopolis Waters
CHICAGO, Dec 26 (Reuters) - Chicago Mercantile Exchange live
cattle futures closed higher on Thursday on short-covering in an
otherwise quiet post-holiday session, traders said.
December live cattle futures finished 0.350 cent
higher at 132.700 cents per lb, and February gained
0.425 cent at 134.150 cents.
Investors await this week's cash cattle sales, knowing
packer margins are poor and beef demand has been inconsistent.
The sluggish beef demand, which is not expected to improve
until the new year, has created a negative tone in the cattle
market, said K&S Financials analyst Jack Salzsieder.
Cash cattle bids in Texas and Kansas were at $129 per cwt,
with no response from sellers, feedlot sources said. Last week,
the bulk of cattle in the U.S. Plains moved at $130, they said.
Thursday morning's wholesale price for choice beef was up 42
cents per cwt from Tuesday at $197.28, while the select cutout
dropped $1.10 to $190.88, USDA said.
Beef packer margins for Thursday were estimated at a
negative $72.55 per head, compared with a negative $51.00 per
head a week ago, according to HedgersEdge.com.
Packers have little interest in raising bids for cash cattle
with some plants operating at reduced levels during the
Christmas and New Year's holidays.
Cargill Inc's beef packing plant in Dodge City,
Kansas, which was idled by fire on Monday, is expected to return
to normal operations as early as Saturday, a company spokesman
said in an e-mail.
Live cattle futures received an added boost from buying in
CME's feeder cattle market.
Feeder cattle at the CME moved higher as corn prices
declined on worries that demand from China may ease. Lower-cost
corn could encourage feedyards to buy young cattle.
Feeder cattle for January closed at 166.600 cents
per lb, up 0.350 cent, and March finished at 167.200
cents, up 0.550 cent.
HOGS SAG ON PORK DEMAND
CME hogs, on a continuous lead-month chart basis,
landed in negative territory for a fourth straight session,
pressured by lower wholesale pork prices, traders and analysts
The morning's USDA wholesale pork price was down $1.75 per
cwt from Tuesday to $84.14, brought down by $4.89 drop in pork
bellies, which are made into bacon, USDA said.
"There's a lot of bellies in storage right now. And, bacon
demand could stumble as people return from holiday vacations," a
Traders sold February hog futures and bought deferred
contracts amid concerns cash hog prices may slip because of
plant shutdowns during the New Year's holiday.
USDA's morning direct hog prices were unavailable. Hog
brokers said cash hogs in the Midwest traded steady, underpinned
by sufficient demand from packers.
Investors adjusted positions ahead of Friday's USDA's
quarterly hog report.
Analysts expect that report to show the U.S. hog herd
declined due in part to a swine virus that is fatal to baby
pigs. Such a decline should shrink pork production in the first
half of 2014.
February hogs closed 0.575 cent per lb lower at
85.300 cents, and April ended down 0.400 at 90.650