* High beef prices underpinning cattle futures
    * Feeder cattle slip as CBOT corn soars
    * Most hog futures firm on higher cash hogs

    By Sam Nelson
    CHICAGO, May 13 (Reuters) - Chicago Mercantile Exchange
(CME) live cattle futures closed firm on Monday as the wholesale
beef market remained near record highs and on improving profits
for the nation's beef packers, traders and analysts said.
    Feeder cattle futures eased on a strong rally in Chicago
Board of Trade corn futures and most lean hog contracts
gained amid stubbornly strong cash hog markets.
    Cattle futures traded very strong early in the day, turned
	

		

			
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down near midday on profit-taking and local day-trade activity,
but ended the session firm.
    "The focus is on changing packer margins which are up and
that's a big change," said Dennis Smith, a broker for Archer
Financial.
    The estimated margins for U.S. beef packing companies on
Monday were $42.00 per head in the black, up from $36.25 on
Friday and above $3.90 a week ago, according to Denver-based
livestock marketing advisory service HedgersEdge.com LLC.
    "The better margins should give cattle some short-term
support and the cash steer market could be higher early this
week as well," Smith said.
    Cash cattle traded lower at $126 per live hundredweight last
week and no new trades had yet been recorded this week.
    Choice wholesale beef carcasses on Monday traded at $204.75
per hundredweight, down 23 cents per hundredweight from late on
Friday but still near the record high that was hit late last
week, according to the U.S. Department of Agriculture (USDA).
 
    "Everybody is still talking about the big discount that
futures hold to cash and the record high beef prices," said Jim
Clarkson a broker for A&A Trading. 
    CME June cattle closed up 0.125 cent per lb at
	

		

			
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120.575 cents per lb and at a roughly $5.50 per hundred weight
discount to the fed cattle cash traded last week.
    
    FEEDER CATTLE VOLATILE
    Feeder cattle futures had soared on Friday as CBOT corn
tumbled following a government report showing an expected big
buildup in corn supplies next season.
    However, feeders slid into the close on Monday as CBOT corn
rebounded due to the tight old-crop supply of the main
feedgrain, strong cash markets and ahead of the Tuesday
expiraton of the CBOT May contract. 
    Higher corn prices increases the cost to feed cattle and can
trim demand and prices for young feeder cattle to place on feed
in the nation's feedyards.
    CME feeder cattle for May delivery were down 0.525
cent per lb at 134.850 cents per lb and for June were
down 0.425 cent per lb at 146.200.

    MOST HOG CONTRACTS GAIN
    Most lean hog contracts ended higher with the exception of
thinly traded spot May which was down 0.075 cent per lb
at 91.925 cents per lb.
    Lean hogs for June delivery were up 0.425 cent per
lb at 90.925 cents per lb.
    "Hogs (futures) were sold down pretty hard last week so
they're coming back a little from that and cash is up again
today," Clarkson said.
	

		

			
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    Cash hog markets in Iowa and southern Minnesota were 50
cents per hundredweight to $1.00 higher, steady to $1.00 higher
in Ohio and steady in Indiana and Illinois. 
    Cash hog dealers said there was a tight supply in Iowa and
Minnesota with some packers needing hogs but a slower demand was
noted elswhere.
    In contrast to the cattle business, packer and processor
profit margins in hogs are lacking, leading to some outlooks for
a lower hog futures market soon.
    "It's just the opposite in hogs, packer margins are coming
down so once we get past the higher cash hog markets early this
week, I see it coming down," Smith said.
    "The seasonals say we should be coming down pretty soon."
    Estimated margins for U.S. pork packing companies were $6.25
per head in the red on Monday, compared to a negative $10.35 on
Friday and a minus $7.90 per head profit a week ago, according
to HedgersEdge.com. 
    "Some say a seasonal high is in and we should be coming
down, so there is a big tug of war going on in hogs and I'm not
sure which way they're going," Clarkson said.

 (Additional reporting by Alyce Hinton in Chicago; Editing by
Chizu Nomiyama)