* 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
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
BEEF PRICES RALLY LIVE CATTLE
CME live cattle futures turned higher boosted by another
record-setting day for wholesale beef values, said analysts and
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'
"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
August ended 0.600 cent higher at 119.150 cents. It
fought back from an early-session fresh contract low of 117.825
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
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
(Reporting by Theopolis Waters; Editing by Tim Dobbyn)