By Tom Polansek

CHICAGO, July 17 (Reuters) - Chicago Mercantile Exchange live cattle futures backpedaled on Thursday after climbing to contract highs during the previous session, while hog futures jumped.

Traders projected the cattle market's setback would be short lived as futures remain too low compared to cash prices.

Futures and cash prices have set records this year as U.S. cattle inventories have dwindled to their lowest levels in decades. Meatpackers, such as Tyson Foods TSN.N, increasingly must compete to buy limited supplies of cattle from farmers to process into beef.

CME August live cattle futures LCQ25 finished down 0.225 cent at 223.675 cents per pound after setting a contract high of 224.400 cents on Wednesday.

CME August feeder cattle futures FCQ25 closed 0.575 cent lower at 325 cents per pound.

"Every time we see breaks, the market finds support," a broker said. "Futures are way too low versus the cash."

Strong cash prices for cattle and declining beef prices have squeezed meatpackers' profits. They were losing an estimated $174.35 per head of cattle they slaughtered on Thursday, according to HedgersEdge.com.

Light trading of cattle in the cash market this week has been largely steady from last week, when prices climbed, traders said.

"The cash market just doesn't break," the broker said.

In demand news, weekly U.S. beef export sales were 8,800 metric tons for 2025, down 24% from the previous week and 28% from the prior four-week average, the U.S. Department of Agriculture said.

For pork, weekly U.S. export sales of 17,100 metric tons for 2025 were down 30% from the previous week and 48% from the prior four-week average.

The wholesale U.S. pork carcass cutout price increased $1.58 to $113.32 per hundredweight on Thursday amid higher prices for bellies and loins, according to USDA data.

CME August lean hog futures LHQ25 ended up 1.4 cents at 105.825 cents per pound.

(Reporting by Tom Polansek in Chicago; Editing by Mohammed Safi Shamsi)

((Thomas.Polansek@thomsonreuters.com))