* CME feeders slip as corn prices climb * Hog futures gain amid discount to cash By Theopolis Waters CHICAGO, Aug 12 (Reuters) - Chicago Mercantile Exchange live cattle futures on Monday rallied with higher cash prices and improved wholesale beef values, traders and analysts said. The U.S. Department of Agriculture on Monday morning quoted the wholesale price, or cutout, of choice beef at $190.03 per hundredweight (cwt), up $1.04 from Friday. Select cuts were 63 cents higher at $182.63. Last week, packers in Texas and Kansas paid $121 per cwt for cattle in the cash market, up $2 from the week before. Live-basis cattle in Nebraska fetched $123.50, roughly $3 higher than the week before. "People are convinced that we've finally put in our cash and cutout summer seasonal lows," a trader said. Grocers buy beef a few weeks before the Sept. 2 U.S. Labor Day holiday, the last grilling holiday of the summer. And beef demand typically picks up in early autumn as consumers transition from grilling cuts to those more suited for cooking indoors. Speculators bought distant live cattle contracts as corn prices marched upward in response to USDA's bullish crop production report Monday morning. Costlier corn may prompt cattle and hog producers to feed fewer animals and nourish them to lighter weight. August live cattle futures ended 1.100 cents higher at 123.600 cents per lb. October closed up 0.525 cent to 127.400 cents. CME feeder cattle prices felt pressure from the jump in corn prices. Higher corn costs might deter feedlots from buying young cattle. Feeder cattle futures slipped on corn, but still may be overpriced based on high cash feeder cattle costs and current deferred-month CME live cattle futures, A&A Trading Inc broker Jim Clarkson said. August feeders closed at 153.500 cents, down 0.350 cent per lb, while September closed at 157.000 cents, 0.475 cent lower. CME HOGS UP ON DISCOUNT TO CASH August CME hogs were guided by the exchange's hog index at 101.93 cents, traders and analysts said. "August could expire on Wednesday close to $102 as long as cash prices cooperate. And October will look awfully cheap compared to the index when August goes off the board" a trader said. Cash hog prices on Monday morning came in mixed. A major pork processor which was closed last Friday due to seasonally tight supplies had all the hogs it needed on Monday. Other packers are buying hogs to accommodate this week's production. Traders are tracking pork demand ahead of the three-day Labor Day holiday weekend. Government data Monday morning showed the wholesale pork price on a plant-delivered basis at $105.33 per cwt, which was 54 cents lower than on Friday. Speculative traders bought deferred hog contracts in anticipation of hog farmers possibly not adding to their herds if corn prices continue to move higher. "Guys buying the back summer months on thoughts that expansion will not occur due to the knee-jerk rally in the corn. But that is faulty thinking ... herd expansion is a done deal," said independent livestock futures trader Dan Norcini. Spot August hogs closed at 101.400 cents per lb, or 0.875 cent higher. Most actively traded October ended at 86.200 cents, or 1.225 cent higher.