LIVESTOCK-U.S. hog futures shrug off pig virus sell off

* Live cattle jump as beef prices set new record
    * Feeder futures follow CME live cattle higher

    By Theopolis Waters
    CHICAGO, May 20 (Reuters) - Chicago Mercantile Exchange hogs
recovered on Monday from Friday's selloff, led in part by news
of a hog virus outbreak in Iowa's pig population, said traders
and analysts.  
    Last Friday, the U.S. Department of Agriculture's National
Veterinary Services Laboratories detected porcine epidemic
diarrhea (PEDV) in Iowa's hog herd.
    Three hog farms in Indiana have also tested positive for the
disease, a U.S. pork industry veterinarian official said. 
	
PEDV does not pose a human health or food safety risk and pork is safe to eat, a USDA spokesman said. "Like all things uncertain, futures had a negative reaction and people had the weekend to figure out that it's a non-event for the market," a trader said. Still, spreaders bought October and December futures in anticipation of tighter supplies if the disease causes significant deaths among baby pigs, he said. June hogs closed up 0.550 cent per lb to 92.075 and July ended at 91.525 cents, or 0.550 cent higher. Investors periodically sold into rallies in anticipation of cash hog and wholesale pork values topping out heading into the May 25 to 27 U.S. Memorial Day holiday. The government's Monday mandatory wholesale pork price or cutout calculated on a plant-delivered basis, was $93.38 per hundredweight, down 10 cents from Friday. The average hog price on Monday in the most-watched Iowa/Minnesota market was $90.57 per cwt, up $1.37 from Friday, according to USDA data. Lower cash hog prices and the higher pork cutout improved packer operating margins. U.S. pork packer margins on Monday were estimated at a negative 95 cents per head, compared to a negative $2.15 on Friday and a negative $6.25 a week ago, according to HedgersEdge.com.
BEEF PRICES RALLY LIVE CATTLE CME live cattle futures turned higher boosted by another record-setting day for wholesale beef values, said analysts and traders. U.S. government data showed the wholesale price of choice beef, or cutout, on Monday afternoon up 53 cents per cwt to $210.04 per cwt, beating the $209.96 per cwt set Monday morning. Futures' persistent discount to last week's cash cattle prices helped the market overcome Friday's moderately bearish USDA cattle-on-feed report. The data showed April cattle placements above analysts' average estimates. "Futures have built in so much of discount before the report was issued that it was hard to see the market going much lower," a trader said. June cattle closed at 120.125 cents, up 0.725 cent per lb. August ended 0.600 cent higher at 119.150 cents. It fought back from an early-session fresh contract low of 117.825 cents. Investors await this week's cash cattle trade. Last week, cash-basis cattle in the U.S. Plains moved at mostly $125 to $126.50 per cwt, compared with $126 to $127 the previous week, feedlot sources said. Despite expanded margins and all-time high beef prices, packers may keep a lid on cash spending as they need fewer animals during next week's holiday-shortened work week.
U.S. beef packer margins on Monday were estimated at a positive $73.20 per head, compared to a positive $69.80 on Friday and a positive $42.00 a week ago, according to HedgersEdge.com. Aside from the May contract, CME feeder cattle closed in line with the higher live cattle market. May feeder cattle, which will expire on May 23, settled at 132.525 cents, down 1.375 cents per lb. August settled at 144.475 cents, 1.100 cents higher and September finished 1.125 cents lower at 146.825 cents. (Reporting by Theopolis Waters; Editing by Tim Dobbyn)

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