* Live cattle climb lifts feeder futures
* CME hogs up with wholesale pork values
By Theopolis Waters
CHICAGO, May 21 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Tuesday closed higher after wholesale beef
prices notched another record high fueled by grilling demand and
tight supplies, said traders and analysts.
Supermarkets are also close to booking fresh beef for the
May 25 to May 27 U.S. Memorial Day holiday backyard cookouts.
U.S. Department of Agriculture data on Tuesday morning
showed the wholesale price of choice beef, or cutout, up 21
cents to $210.46 per hundredweight, besting the previous record
of $210.25 set late on Monday.
"Beef demand has not given up and finally futures are taking
notice," said Oak Investment Group president Joe Ocrant.
CME live cattle futures' upswing lifted June and August
above their respective 10-day moving averages of 120.31 and
120.02 cents, triggering speculative and fund buying.
June cattle closed at 121.100 cents, up 0.975 cent
per lb. and August ended 1.225 cents higher at 120.375
Futures' rise stirred expectations for cash cattle to trade
steady with last week's $124 to $126.50 per hundredweight. So
far there were no cash bids or asking prices reported, said
Beef cutout's record-setting pace and expanding packer
operating margins could underpin cash prices this week.
HedgersEdge.com calculated U.S. beef packer margins on
Tuesday at a positive $83.25 per head, compared to a positive
$73.20 on Monday and a positive $40.85 a week ago.
However, packing plants will be closed on Monday for the
three-day U.S. Memorial Day holiday weekend, reducing their need
CME feeder cattle spot-May closed 0.625 cent per lb
lower at 131.900 cents. It was guided by ideas about where the
contract will settle after it expires on May 23.
Lower prices for cash feeder cattle in the most-watched
Oklahoma City market pressured spot-month futures.
Other more actively-traded feeder cattle contracts followed
CME live cattle higher.
August settled at 146.475 cents, 2.000 cents higher
and September finished 2.075 cents higher at 148.900
HOGS GAIN WITH CATTLE
CME hogs drew support from the higher live cattle market,
said traders and analysts.
Hog futures at times follow the live cattle market because
beef is a competing meat, a trader said.
And grocery shoppers may switch from high-priced beef
compared to relatively inexpensive pork even though wholesale
pork prices rose on Tuesday, he said.
USDA's Tuesday morning mandatory wholesale pork price or
cutout calculated on a plant-delivered basis, was $93.48 per
hundredweight, up 68 cents from Monday.
June hogs closed up 0.325 cent per lb to 92.400 and
July ended at 91.750 cents, or 0.225 cent higher.
Nonetheless, traders sold into rallies in anticipation of
cash hog and wholesale pork prices peaking soon as hog numbers
begin to increase seasonally.
The average hog price on Tuesday in the western Midwest
market was down 76 cents per hundredweight from Monday to
$88.89, according to USDA data.
Packing plants will be closed for Monday's holiday, limiting
their need for supplies. And unprofitable margins will prompt
some packers to curb Saturday's slaughter.
U.S. pork packer margins on Tuesday were estimated at a
negative $2.55 per head, compared to a negative 95 cents on
Monday and a negative $5.55 a week ago, according to
Investors continue to monitor developments after U.S.
government and industry veterinary officials recently detected
cases of porcine epidemic diarrhea virus (PEDV) in Iowa and
Indiana hog herds.
PEDV does not pose a human health or food safety risk and
pork is safe to eat, a USDA spokesman said.
(Reporting by Theopolis Waters; Editing by Nick Zieminski)