Chicago Mercantile Exchange live cattle futures sagged on Monday in advance of potentially lower cash prices this week as packers attempt to recover lost profits, said traders.

February live cattle closed down 0.475 cent per pound at 115.925 cents, and April was 0.625 cent lower at 112.525 cents.

Monday's average beef packer margins were at a negative $81.80 per head, down from negative $75.10 on Friday and a negative $59.75 a week ago, as calculated by HedgersEdge.com.

Last week, slaughter-ready, or cash, cattle in the U.S. Plains brought $119 to $120.50, steady to $1.50 higher than in the previous week.

Investors await Wednesday's Fed Cattle Exchange sale of about 4,800 animals that last week, on average, brought $117.50. Some processors have already scaled back production to rein in cash spending, said analysts and traders.

Reduced slaughter rates typically help improve packer margins and stimulate beef buying interest from grocers to avoid possible inventory shortages of meat.

The morning's choice wholesale beef price was up 51 cents per cwt to $188.14 from Friday. Select cuts climbed $1.39 to $187.04, the U.S. Department of Agriculture said.

Fund selling and slumping live cattle futures weighed on CME feeder cattle contracts. March feeders closed down 0.250 cent per pound to 121.825 cents. 

Mostly Lower Hog Futures

CME February lean hogs, which will expire on Thursday, tracked the exchange's hog index for Feb. 9 at 73.51 cents, said traders.

They said other trading months were pressured from profit-taking, technical selling and softer cash hog prices. February hogs ended up 0.200 cent per pound to 74.750 cents.

Most actively-traded April closed 1.375 cents lower at 69.700 cents, and May down 0.450 cent to 74.950 cents.

Monday morning's cash hog price in Iowa/Minnesota averaged $71.54 per cwt in light volume, 64 cents lower than on Friday, the USDA said.

"It sounds to me like most packer inventories are full. But I also heard some of them could still squeeze in a few pigs to round out the edges," a Midwest hog merchant said.

Pork cutout values rose on Monday, mainly because of the rebound in pork belly prices that some believe might trend lower as more supplies come online in the months ahead.

U.S. government data on Monday morning showed the average wholesale pork price up 58 cents per cwt to $85.67 from Friday, following $4.60 higher pork bellies.