* Live cattle slip before Friday's USDA report
* Feeders weaken by modest live cattle losses
By Theopolis Waters
CHICAGO, May 16 (Reuters) - Chicago Mercantile Exchange hog
futures closed higher on Thursday lifted by strong wholesale
pork values in tight seasonal supplies, analysts and traders
CME June hogs settled up 0.950 cent to 92.875 cents
per lb while July closed at 92.550 cents, or 0.700 cent
Wholesale pork values proved solid all week as grocers
stocked up on fresh meat to feature during the May 25th U.S.
Memorial Day holiday weekend, a trader said.
The U.S. Department of Agriculture's Thursday morning
mandatory wholesale pork price, calculated on a plant-delivered
basis, was $92.72 per cwt. That was up 52 cents from Wednesday
and the highest price since USDA began the dataset in January.
Spot-June hogs led advances with help from bullish spreads.
Upward futures' momentum briefly carried the spot month above
the 100-day moving average of 93.25 cents where fund buyers
CME hogs returned below the 100-day moving average as
concerns that cash hog and wholesale prices are about to peak
"I saw a reason to buy futures given that 100-day moving
average and a reason to sell based on talk of lower cash prices
soon," said independent hog futures trader James Burns.
The average hog price on Thursday morning in the
most-watched Iowa/Minnesota market was $89.42 per cwt, $2.03
lower than on Wednesday.
Processors are reducing slaughter rates to offset the
seasonal decline in hog numbers and recover their lost margins.
And, packing plants will be closed on Memorial Day, limiting
their need for supplies.
From Monday to Thursday, packers processed 1.623 million
hogs, down 11,000 from a week earlier and 19,000 fewer than a
year ago during the same period.
And U.S. pork packer margins on Thursday were estimated at a
negative $7.10 per head, compared to a negative $6.30 on
Wednesday and a negative $12.40 a week ago, according to
CATTLE DIP DESPITE BEEF RECORD
CME live cattle futures posted modest losses, with some
contracts marking new lows, in anticipation of record-high beef
prices topping out soon, analysts and traders said.
And investors adjusted positions ahead of the government's
monthly cattle-on-feed report to be released on Friday at 2 p.m.
CDT (1900 GMT).
Analysts expect the data to show the number of cattle placed
in feedlots last month likely rose year-over-year as feed costs
June closed at 119.900 cents, down 0.100 cent per
August ended down 0.125 cents to 119.725 cents
before drifting to a new contract low of 119.325 cents in
Government data quoted wholesale price of choice beef, or
cutout, on Thursday morning at $208.99 per cwt, eclipsing the
previous record set Wednesday morning at $208.18.
"Granted we've got some pent-up spring grilling demand
leading into Memorial Day, but that should taper off soon
afterwards," a trader said.
And cattle numbers tend to rise this time of year giving
packers leverage in negotiating prices, he said.
Thursday morning, cash-basis cattle in Texas traded at $125
per cwt, down $1 per cwt. Cash bids elsewhere in the state and
the Plains stood at $125 against $127 or higher asking prices,
said feedlot sources.
Even though cash prices fell short of CME traders'
expectations, they remain well above where futures are currently
trading at around 120.000 cents per lb.
CME feeder cattle closed in line with the weaker live cattle
May feeder cattle closed at 135.025 cents, down
0.050 cent per lb. It drifted to a fresh contract low of 134.750
cents in after-hours trading.
August settled at 145.125 cents, down 0.175 cent.
(Editing by David Gregorio)