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* Smithfield news "not surprising" to futures traders * Beef quote, fund roll weaken CME live cattle * Feeder cattle firm as corn prices drift lower By Theopolis Waters CHICAGO, Sept 9 (Reuters) - Chicago Mercantile Exchange hog futures closed mostly higher on Monday as funds sold the October contract and bought deferred months led by the Standard & Poor's Goldman Sachs Commodity Index (S&PGSCI), traders said. Funds that follow the S&PGSCI shifted, or rolled, their CME hog and live cattle October long positions mainly into December. Monday was the first of five days for the procedure. "The huge October open interest suggests funds will be rolling big time over the next few days," a trader said. October hogs ended down 0.025 cent to 90.875 cents per lb. It hit a new contract high of 91.175 cents in after-hours trading. December ended 0.625 cent higher to 87.625 cents and posted a new contract high of 87.675 cents. February finished at 88.700 cents, up 0.450 cent. It peaked at a contract high of 88.775 cents. October futures were weighed by lower cash hog prices. The U.S. Department of Agriculture on Monday morning reported the average hog price in the most watched Iowa/Minnesota market at $88.21 per cwt, $1.99 lower than on Friday. Packers cut cash hog bids to offset a brief decrease in supplies and stabilize their slipping margins. Estimated margins for U.S. pork packers on Monday were a positive $4.65 per head, compared with a positive $6.05 on Friday, according to HedgersEdge.com. With respect to tight supplies, a heat wave in the U.S. Plains a few weeks ago and a late-summer warmup in the central Midwest now slowed animal weight gains, resulting in fewer hogs. And producers moved hogs ahead of schedule in late August to avoid lower cash prices as supplies increase seasonally. The prospect that spread of the Porcine Epidemic Diarrhea virus (PEDv), which is deadly to baby pigs, will reduce hog supplies later this year encouraged more far-month hog futures buyers. Traders were indifferent to word on Friday that the U.S. Committee on Foreign Investment cleared the way for China's Shuanghui International's planned purchase of Smithfield Foods Inc.. "That was not surprising. There was enough money involved in that deal to where we (traders) think it's going to get done," said independent hog futures trader James Burns. BEEF, ROLL PRESSURES LIVE CATTLE FUTURES Weak wholesale beef prices and funds shifting their long positions into deferred contracts pulled down CME live cattle, analysts and traders said. October closed down 0.325 cent per lb to 125.350 cents, while December ended at 128.725 cents, 0.300 cent lower. The USDA on Monday morning showed the wholesale choice beef price at $194.50 per cwt, down 73 cents from Friday. Select cuts dropped 88 cents to $180.31. Beef demand typically lags after the Labor Day holiday, seen as the end of the summer grilling season. Some packers may curtail slaughter rates to improve their margins. The move will also result in less meat which could lift wholesale beef prices. The lack of cash cattle price developments sidelined would-be futures buyers. Last week, cash cattle in Texas and Kansas moved at $123 per cwt, which was steady with the week before, feedlot sources said. They said live-basis cattle in Nebraska a week ago traded at mostly $123 per cwt, down $1 from the previous week. Weaker corn prices, which may help feedlot demand for young cattle, underpinned CME feeder cattle. September and October both ended up 0.025 cent, to 156.600 cents and 158.050 cents, respectively.