By P.J. Huffstutter

CHICAGO, June 25 (Reuters) - Chicago Mercantile Exchange cattle futures closed higher on Thursday, with feeder cattle continuing to surge on strong cash market prices, market analysts said.

Prices in the cash cattle markets continued to support futures at a time when U.S. cattle supplies are historically tight, analysts said. And even though wholesale prices dropped earlier in the day, retail meat prices remain lofty, analysts said.

For boxed beef, the U.S. Department of Agriculture reported that values for choice cuts eased by $1.80 to $397.14 per hundredweight (cwt) on Thursday morning. USDA reported that select cuts dropped by $1.73 to $376.41 per cwt.

While the cash cattle markets are showing some signs of cooling slightly this week, they are maintaining a big premium to futures, said Don Roose, president of U.S. Commodities. That premium makes cattle futures seem underpriced, he said.

In Iowa, there were cash bids of $260 per cwt this week, but packers passed on those prices, Roose said. As a result, he said, analysts are expecting the cash trade in the northern markets to ease this week to around $257 to $258 per cwt.

"Still, this has been a cash-led bull market," Roose said. "The futures can only drop so far because of what's happening in the cash market."

CME benchmark August LCQ26 live cattle ended 0.700 cent higher at 247.225 cents per pound, and the thinly traded June contract LCM26 set a fresh high during the session before settling up 1.400 cent at $257.400 per pound.

Meanwhile, CME August feeder cattle FCQ26 futures closed up 0.375 cent at 373.300 cents per pound.

CME lean hog futures were mixed. The U.S. Department of Agriculture's hogs and pigs report, released after the close of trade on Thursday, showed the total hog herd was roughly the same as the previous year, while analysts surveyed by Reuters on average had expected the government to show a slightly larger herd, at 100.9% of a year ago.

Wholesale prices for pork turned higher Thursday afternoon, with the USDA reporting that pork carcasses were priced at $95.22 per cwt, up $1.36.

Most-active August LHQ26 hogs settled 0.100 cent lower at 96.600 cents, while the back-end months ticked higher.