Most Chicago Mercantile Exchange live cattle contracts drifted lower on Monday on ample supplies that pressured wholesale beef values and could again hurt cash prices by Friday, traders said.

Thinly traded August futures, which will expire on Wednesday, were supported by their discount to last week's prices for market-ready, or cash, cattle.

August live cattle closed up 0.400 cents per pound at 110.750 cents.

Most actively traded October ended 1.275 cents lower at 105.075 cents and hit a contract low of 105.000 cents. December ended 1.075 cents lower at 107.025 cents and posted a low of 106.775 cents.

The morning's choice beef price fell 57 cents per cwt from Friday to $198.91. Select cuts dropped 60 cents to $192.97, according to the U.S. Department of Agriculture.

Last week, cash cattle in the U.S. Plains brought mostly $115 per cwt, $2 to $3 lower than the week before, feedlot sources said.

"Packers are buying for a reduced kill week next week, and the trade is gearing up for a very tough supply month heading into September," said Allendale Inc chief strategist Rich Nelson.

Healthy packer profits are providing packers enough incentive to maintain current high production levels, a trader said.

Average beef packer margins for Monday were a positive $55.25 per head, up from a positive $34.40 on Friday and up from a positive $16.10 a week ago, as calculated by HedgersEdge.com.

Lower cash feeder cattle prices and live cattle market declines pulled down CME feeder cattle. September ended 0.775 cent per pound lower at 139.150 cents.

Hog futures end mostly weak

CME lean hogs' discounts to the exchange's hog index for Aug. 25 underpinned the October contract, while profit-taking and soft cash prices pressured other months, traders said.

October ended up 0.050 cent per pound at 61.375 cents. December finished down 0.300 cent at 56.325 cents, and February 0.350 cent lower at 60.600 cents.

Investors are encouraged about wholesale pork values after forging a low about a week ago, but cash hog prices are still unable to gain strength, said Nelson.

"Right now the short term focus is we have too much supply," he said.

Monday morning's Midwest cash hog prices were mostly 50 cents per cwt lower, said regional hog merchants.

The morning's wholesale pork price rose 85 cents per cwt to $77.24 from Friday, the USDA said.