LIVESTOCK-CME April lean hogs near 8-month high; live cattle end mixed

CHICAGO, Feb 20 (Reuters) - Chicago Mercantile Exchange lean hog futures hit their highest in nearly eight months on Tuesday, lifted by firming cash hog prices and speculative buying, traders said.

CME April hogs settled up 0.450 cent at 85.675 cents per pound, paring gains after reaching 87.100 cents, the contract's highest since June 28.

Hog futures have rallied since setting contract lows at the start of the calendar year. Managed commodity funds stretched their net long position in CME hog futures to 34,538 contracts by Feb. 13, weekly regulatory data showed, the largest net long since September. The funds had held a net short position in hogs as recently as late January.

Meanwhile, the CME's Lean Hog Index, a two-day weighted average of cash prices, rose to 75.75 cents per pound on Tuesday, its highest reading since mid-November.

"Things are much better in the hog market right now than they have been," said Sterling Smith, director of agricultural research at AgriSompo North America. "Cash hogs have moved up nicely. That will cast plenty of support," Smith said.

High retail prices for beef lent strength to the hog market, Smith noted, making pork a more attractive option for consumers.

CME live cattle futures closed mixed on Tuesday, with nearby contracts declining on profit-taking after the benchmark April contract failed to surpass Friday's three-month high. April live cattle closed down 0.225 cent at 187.325 cents per pound.

But back months and feeder cattle futures ended higher, supported by tight cattle supplies. The U.S. cattle herd has dwindled to its smallest level in more than seven decades after drought in recent years reduced the amount of pasture for grazing.

CME March feeder cattle settled up 0.350 cent at 251.375 cents per pound and reached the highest level since Oct. 19.

Ahead of the U.S. Department of Agriculture's monthly Cattle on Feed report due Friday, analysts surveyed by Reuters on average expect the government to report that placements of cattle into U.S. feedlots during January fell 11.6% from a year earlier. (Reporting by Julie Ingwersen; Editing by Rashmi Aich)