LIVESTOCK-US hogs end lower on weak pork price

CHICAGO, June 18 (Reuters) - U.S. hogs fell on Thursday amid an unexpected drop in pork values a day earlier to their lowest level in 1-1/2 months, but futures were able to pare losses by the session's end.

U.S. Agriculture Department data on Wednesday afternoon showed the pork cutout value, a compilation of various pork cuts, fell $2.77 to $54.87 per cwt, its lowest since May 4.

But several traders disputed the data, saying that cutout values could not have dropped that much at a time when meat packers were willing to pay up for cash hogs.

"You just do not normally see packers paying higher cash prices for hogs in order to secure them with the cutout falling into a black hole," said Dan Norcini, an independent lean hog trader. "It makes zero sense to me to see packers chasing hogs and yet the cutout utterly collapsing."

"I have never witnessed such volatile price action in the wholesale pork cutout as I have seen in the past few weeks," Norcini added.

Other traders agreed that the price break was unexpected and it was not consistent with a firming tone to pork prices and packers paying up for cash hogs this week.

"For the cash to be firm on Monday and Tuesday, the cutout to be firm, slaughter to be up from last year and then for cutout to be sharply lower and cash not to be sharply lower - something is just not right in the math, in my opinion, on this pork cutout value. I simply don't believe the math," said Dennis Smith, broker with Archer Financial.

But further weakness in some pork products early on Thursday again weighed on futures late in the session. Cash hams and pork bellies were both quoted lower in the morning USDA National carlot pork report.

July lean hogs 2LHN9 closed off 0.025 at 59.925 cents per lb and August 2LHQ9 was off 0.400 at 59.150.

Reports of some cash cattle trading at higher values in Nebraska, a higher stock market and as lower dollar lent support to live cattle futures in generally light dealings. Trading was light as some traders moved to the sidelines ahead of Friday's USDA monthly Cattle on Feed report.

Some cash cattle trading steady to up $1 per cwt in Nebraska and improved beef export number from last week lent support while a decline in boxed beef values and overhead technical resistance limited upside potential.

USDA on Thursday reported last week's beef export sales at 10,900 tonnes, up from 5,500 tonnes the previous week. Exports were put at 10,600 tonnes, a marketing year high, up from 10,100 tonnes the previous week.

Analyst estimates for Friday's cattle report put on-feed supply as of June 1 at major feedlots at an average 96.7 percent, in a range of 96 to 98.5 percent, possibly a 10-year low for the month. May Placements could be a 13-year low and averaged 88.3 percent in a range of 82.9 to 97 percent.

But May marketings could be a record low for the month since the series began in 1996 and averaged 91 percent in a range of 90 to 92.4 percent.

June live cattle 2LCM9 ended up 0.575 cent at 80.775 cents per lb and August 2LCQ9 was up 0.325 at 81.700.

Feeder cattle futures continued to follow the lead of live cattle and August 2FCQ9 closed up 0.475 at 97.800 cents per lb and while September 2FCU9 was off 0.025 at 97.675. (Reporting by Jerry Bieszk; Editing by Marguerita Choy)