* Wholesale beef price setback weighs * CME hogs up on cash, Smithfield news By Theopolis Waters CHICAGO, May 30 (Reuters) - Chicago Mercantile Exchange live cattle slumped on Thursday as futures fell below technical support triggering fund liquidation, traders and analysts said. CME live cattle June dropped beneath the respective 40-day and 20-day moving averages of 121.069 and 120.643 cents. It closed at 120.350 cents, or 1.025 cent per lb lower. August drifted below the 20-day and 10-day moving averages of 120.200 and 119.327 cents. It finished 1.350 cent lower at 119.050 cents. Slipping wholesale beef prices put investors in a selling mood while waiting for cattle in the cash market to change hands. Cash cattle bids in Texas and Kansas stood at $122 per hundredweight versus $126 asking prices, said feedlot sources. Cattle last week moved at $124 to $125.50. U.S. Department of Agriculture data on Thursday afternoon quoted the wholesale price of choice beef down 98 cents per hundredweight from Wednesday to $208.55 per cwt. Select cuts were at $189.09, $1.24 cents lower. "Packers don't act particularly aggressive but margins are good and they will be looking for cattle for a full kill next week," Hales Trading Co president David Hales said. HedgersEdge.com calculated U.S. beef packer margins on Thursday at a positive $75.25 per head, compared with a positive $68.35 on Wednesday and positive $89.80 a week earlier. However, more cattle available for sale this week and futures' pullback on Thursday present challenges for cash prices. CME feeder cattle fell in sympathy with lower live cattle futures and chart-related selling. August ended 1.450 cents per lb lower at 144.175 cents and September settled at 146.350 cents, or 1.425 cents lower. CASH LIFTS HOGS Cash price strength lifted CME hogs, traders and analysts said. Thursday afternoon's USDA data showed the average hog price in the most-watched Iowa/Minnesota market at $93.44 per hundredweight, $1.14 higher than on Wednesday. Packers are gearing up for a Saturday slaughter estimated at around 200,000 head to make up for plants closed during last Monday's Memorial Day holiday, a trader said. Wednesday's news of the pending sale of Smithfield Foods to China's Shuanghui International $4.7 billion helped underpin late-fall delivery hog futures. "If the sale goes through it would be great for U.S. pork exports. But it's hard for me to get excited without knowing all the details," a trader said. Anticipation of lower cash hog prices early next week as processors attempt to realign their margins curbed CME hog futures' advances. And wholesale pork values encountered retail buying resistance at current price levels, which at times contributed to futures' selling. The government's Thursday afternoon mandatory wholesale pork price, or cutout, calculated on a plant-delivered basis, was $95.03 per hundredweight, down 5 cents from Wednesday. June hogs closed 0.600 cents per lb higher at 95.325 cents and July ended at 93.475 cents, up 0.475 cent.