* Feeder cattle contracts end lower
* CME hog futures down, but off lows
* USDA cattle report set for Friday
By Theopolis Waters
CHICAGO, Sept 18 (Reuters) - Chicago Mercantile Exchange live cattle settled lower on Thursday in anticipation of packers spending less for market-ready, or cash, cattle this week, traders said.
October live cattle futures finished 1.425 cents per lb lower at 155.600 cents, and December at 158.925 cents down 1.075 cents.
Processors may cut slaughters, and resist raising bids for cattle, to recoup lost margins and improve wholesale beef prices, traders and analysts said.
A beef processing plant may be offline on Friday for scheduled repairs, which should reduce their need for supplies, they said.
Thursday morning's choice wholesale beef price fell 76 cents per hundredweight (cwt) to $245.15. Select gained 49 cents to $232.81, the U.S. Department of Agriculture said.
Beef packer margins were a negative $66.70 per head, compared with a negative $55.25 on Wednesday and a positive $1.70 a week ago, according to Colorado-based analytics firm Hedgersedge.com.
Isolated cash cattle bids surfaced in Kansas at $155 per cwt against sellers asking $164, feedlot sources said. Last week, cash cattle in the U.S. Plains sold at $161 to $162.
The weak cash price prospect stirred bear spreads, which consisted of traders who sold the October contract and simultaneously bought back months.
Investors await the government's monthly Cattle-On-Feed report on Friday.
Analysts expect the data to show fewer cattle arrived in feedlots last month after sufficient pastures allowed ranchers to fatten animals outside of feedyards longer.
CME feeder cattle futures felt pressure from profit-taking and live cattle market selling.
September and October closed down 0.400 cent per lb to 229.900 and 227.700 cents, respectively.
CME lean hogs ended lower, but off session lows, after traders sold the October contract and at the same time bought deferred months through bear spreads, a trader said.
Investors conducted bear spreads with the view that a seasonal bump in supplies could pressure cash hog and wholesale pork values.
Traders said they prefer to wait for USDA's afternoon hog and pork price data that have more packer participation than the morning reports.
Thursday morning's average hog price in the eastern Midwest was down 59 cents per cwt at $99.31, USDA said.
Separate data showed the morning wholesale pork price rose $1.52 per cwt to $111.63.
Some speculators adjusted deferred-month positions in advance of the government's quarterly hog report on Sept. 26.
October closed 2.125 cents per lb lower at 102.975 cents.
December finished down 0.100 cent per lb at 93.800, after returning above the respective 20-day and 40-day moving averages of 93.30 and 92.76 cents.
Editing by Marguerita Choy