LIVESTOCK-U.S. live cattle futures fall despite record beef prices

* Lower cash cattle prices pressure futures
    * Feeders follow live cattle market lower
    * Hogs up with cash prices in tight supply

    By Theopolis Waters
    CHICAGO, May 8 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Wednesday fell for a fourth straight session
as lower cash cattle prices weighed on the market despite
record-high beef values, traders and analysts said.
    U.S. Department of Agriculture data showed wholesale price
of choice beef, or cutout, on Wednesday jumped $3.48 per cwt
from Tuesday to a new all-time high of $204.67 per cwt. It
bested the previous mark set last Friday of $201.68.
A small number of cash cattle in Texas and Kansas moved at $126 per cwt, down $2 from last week, feedlot sources said. Bids stood at $126 for unsold cattle in both states and elsewhere in the Plains against $130 asking prices, they said. "The strong cutout aside, you can't expect packers to pay more money for cattle considering where futures are at," said Archer Financial Services broker Dennis Smith. The beef cutout benefited as grocers stocked up for the U.S. Memorial Day holiday grilling features. Increased cattle supplies and poor packer margins challenged cash prices. CME live cattle June closed at 120.200 cents, 0.625 cent per lb lower on the day. August ended down 1.050 cents to 120.000 cents before dropping to a new contract low of 119.850 cents in after-hours trading. Deferred CME live cattle contracts bore the brunt of Wednesday's selloff. Spot-June's discount to cash prices stirred bullish spreads that sent August and October to fresh contract lows. June buying at times encountered funds that follow the Standard & Poor's Goldman Sachs Commodity Index roll. Funds that track the index are shifting their spot-June long positions into August and October contracts. Wednesday is the second of five days for that roll.
CME feeder cattle mimicked the live cattle market's four-day slide. Traders exiting spot-May feeder cattle before it expires on May 23 sent the spot month to a new contract low. May feeder cattle closed at 135.600 cents, down 1.275 cents per lb. It fell to a fresh contract low of 135.575 cents in after-hours trading. August settled 1.225 cents lower at 145.325 cents. HOGS UP WITH CASH PRICES Hog futures climbed after packers raised cash hog bids to ensure themselves of supplies to finish out this week's slaughter, said traders and analysts. June hogs settled up 0.475 cent to 91.775 cents per lb while July closed at 91.900 cents, or 0.525 cent higher. The average hog price on Wednesday in the most-watched Iowa/Minnesota market was $91.85 per cwt, $1.44 higher than on Tuesday. Processors actively bought hogs that are in tight supply based on lower animal weights, a trader said. Those reduced weights suggest producers are on schedule in sending their hogs to market. USDA's weekly weight data showed hogs in the Iowa/southern Minnesota market last week averaged 276.8 lbs, down 1.2 lbs from the week before and down 0.1 lb from the same period a year ago. But sinking packer margins and weak wholesale pork prices stirred sentiment that cash hog prices may close to topping out
soon. U.S. pork packer margins on Wednesday were estimated at a negative $11.20 per head, compared to a negative $7.90 on Tuesday and a negative $3.50 a week ago, according to USDA's Wednesday afternoon mandatory wholesale pork price, calculated on a plant-delivered basis, was $87.72 per cwt. That was down 20 cents than on Tuesday. (Editing by G Crosse)

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