LIVESTOCK-US live cattle prices gain on futures’ discount to cash

* Feeder cattle follow CME live cattle higher
    * Hogs mixed, pork price drop stirs bear spreads

    By Theopolis Waters
    CHICAGO, May 28 (Reuters) - Chicago Mercantile Exchange live
cattle rose modestly on Tuesday, aided by futures' discount to
recent cash prices, traders and analysts said.
    CME live cattle also drew support from the uptick in
wholesale beef prices and U.S. stocks' steep climb fueled by
strong economic data.
    The stock market gains reflect the strongest U.S. consumer
confidence since 2008, which is supportive for meat demand, KIS
Futures vice president Lane Broadbent said.
	
Profit-taking and caution before this week's cash cattle sales pulled futures down from session highs. June cattle ended at 120.750 cents, up 0.175 cent per lb, and August ended 0.200 cent higher at 119.425 cents. Cash-basis cattle last week moved at $124 to $125.50 per hundredweight versus $124 to $126.50 the previous week, feedlot sources said. U.S. Department of Agriculture data on Tuesday morning quoted the wholesale price of choice beef, or cutout, up 17 cents per hundredweight to $209.04 per cwt. Select cuts were at $190.64, up 20 cents. Packers were buying cattle for next week, the first full slaughter week after the May 27 U.S. Memorial Day holiday. Profitable margins and lofty cutout values may convince processors to spend at least steady money for supplies, traders said. HedgersEdge.com calculated U.S. beef packer margins on Tuesday at a positive $76.90 per head, compared with a positive $83.25 a week earlier. CME feeder cattle mimicked higher live cattle futures. "Something has to give with this feeder cattle, corn and live cattle equation," Broadbent said. "We're going to have to get the feeder cattle or corn market quite a bit cheaper to justify $124 to $125 per hundredweight cash cattle," he said. August feeder cattle settled at 145.475 cents, up
0.925 cents, and September finished 0.875 cent higher at 147.550 cents. SPREADS STIR MIXED HOGS Lower wholesale pork values sparked bearish CME hog spreads, traders and analysts said. Grocers postponed booking more fresh meat until they determine how much product sold during the three-day holiday weekend. Still, packers are seen raising cash bids in anticipation of a big Saturday slaughter to make up for Monday's holiday downtime. The government's Tuesday afternoon mandatory wholesale pork price, or cutout, calculated on a plant-delivered basis, was $93.87 per hundredweight, 55 cents lower than on Friday. Tuesday afternoon's USDA data showed the average hog price in the most-watched Iowa/Minnesota market at $92.02 per hundredweight, up $2.01 from Friday. June hogs closed down 0.175 cents per lb at 94.700 cents and July ended at 93.350 cents, up 0.050 cent. Both contracts peaked at 3-1/2 month highs. Investors continued to monitor developments as the U.S. pork industry tracks down the origin of porcine epidemic diarrhea (PEDV), a disease found on some hog farms in five top U.S. hog producing states. The virus does not pose a threat to humans and pork remains safe to eat. (Reporting by Theopolis Waters; editing by Jim Marshall)

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