U.S. cattle futures extended gains on Wednesday, with most live and feeder cattle contracts hitting lifetime highs on investment fund buying as wholesale beef prices also climbed, traders said.
The higher cattle prices came despite expectations for weaker trades this week in U.S. Plains cash cattle markets as some beef packers were likely to reduce slaughter rates in the days surrounding Sunday's Easter holiday, curbing demand.
Most-active CME June live cattle settled 0.650 cent higher at 114.350 cents per pound, earlier hitting a life-of-contract high of 115.050 cents. The April contract was the only cattle contract that did not hit a lifetime high, ending up 0.950 cents at 124.200 cents, well below its contract high of 132.250 cents reached in late 2015.
Investors were betting that recent gains in equities markets could entice consumers to boost purchases of goods such as steaks and chops, according to U.S. Commodities analyst Don Roose. "Often, a strong economy equates with a strong cattle market," he said.
All feeder cattle futures contracts hit new highs for the second straight session. CME May feeders topped out at 139.775 cents per pound, before finishing at 137.825 cents, up 0.500 cent.
The U.S. Department of Agriculture after the closing of futures trading said choice-grade wholesale beef was up 76 cents to $210.13 per cwt.
Wholesale pork prices were down 44 cents to $74.73 per cwt, USDA data showed.
Weaker pork price data at midday triggered lower prices in CME lean hog futures , with some contracts easing more than 2 percent.
April hog futures , which expire next week, fell to the lowest levels Dec. 6. Most-active June hog futures settled down 1.725 cents at 72.275 cents per pound, wiping out gains seen earlier this week.
U.S. hog production was up more than 5 percent in the first quarter of the year, according to USDA data, and that larger supply has dragged on the market so far this month.
"The anticipation is that the supply is going to overwhelm the demand," Roose said of hogs.