* 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
Cash-basis cattle last week moved at $124 to $125.50 per
hundredweight versus $124 to $126.50 the previous week, feedlot
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
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
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
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
The virus does not pose a threat to humans and pork remains
safe to eat.
(Reporting by Theopolis Waters; editing by Jim Marshall)