Chicago Mercantile Exchange live cattle futures closed higher on Wednesday, helped by their discounts to preliminary prices for market-ready, or cash, cattle, traders said.

But they said the possibility that packers might pay less for remaining supplies pulled CME live cattle contracts from morning tops.

Futures are anticipating weaker cash prices given the volatile U.S. stock market, improving weather conditions in the U.S. Plains and packers wrestling with unprofitable margins, said U.S. Commodities Inc analyst Don Roose.

On Wednesday, a small number of cash cattle in the U.S. Plains brought $134 per cwt, $2 lower than last week, feedlot sources said. Sellers elsewhere held out for $138.

Wednesday's average beef packer margin was a negative $41.15 per head, down from a negative $33.95 for Tuesday and a negative $15.05 a week ago, as calculated by HedgersEdge.com.

Investors are monitoring the wholesale beef price upswing after processors curtailed slaughter rates to improve their margins.

The morning's wholesale choice beef price rose 83 cents per cwt from Tuesday to $218.86. Select cuts were up 29 cents to $213.89, the U.S. Department of Agriculture said.

February live cattle closed 1.075 cents per lb higher at 132.475 cents, and April ended up 0.650 cent to 131.800 cents.

CME feeder cattle drew strength from buy stops and live cattle futures buying. March feeders finished 2.225 cents per lb higher at 151.225 cents.

CME Group plans to shorten trading hours for its livestock futures and options contracts effective Feb. 29, the exchange said in a statement on Wednesday.

MOSTLY LOWER HOG FUTURES CLOSE CME

February lean hogs were supported by ideas about where it and the exchange's hog index will converge after the contract expires on Friday, traders said.

They added that the morning's lower cash and wholesale pork values, along with future's premiums to CME's hog index for Feb. 8 at 64.89 cents, pressured remaining contracts.

The average cash hog price in Iowa/Minnesota on Wednesday morning slumped $2.07 per cwt from Tuesday in light volume to $62.60, the USDA said.

The morning's wholesale pork price dropped 34 cents per cwt from Tuesday to $76.83, USDA said.

Futures prices may be too high across the board based on government expectations for increased supplies in 2016, said Roose.

Spot February ended up 0.300 cent per lb to 65.150. April closed 1.275 cents lower at 68.350 cents and May finished 1.075 cents lower at 74.675 cents.