U.S. live cattle futures surged to the highest levels in 14 months on Wednesday, lifted by investment fund buying and steep gains at a weekly online cash cattle auction, traders and analysts said.

Chicago Mercantile Exchange feeder cattle rose by as much as 3 percent while lean hogs were mostly lower.

CME April live cattle futures settled 2.550 cents higher at 122.450 cents per pound, notching their biggest daily gains in two months. Most-active June cattle futures finished 2.725 cents higher at 113.775 cents. Sales at the weekly Fed Cattle Exchange auction averaged $133.35 per cwt, up from $128.40 per cwt last week, according to the auction website. 

Beef packers were aggressively buying cattle to capitalize on elevated wholesale meat prices that boosted their profits.

"The $35 rally in boxed beef has a lot to do with it," analyst Ken Morrison, publisher of Morrison on the Markets, said of the gains in cattle futures.

The U.S. Department of Agriculture after the close of futures trading said choice-grade wholesale beef eased $1.93 to $223.00 per cwt. Prices have soared since reaching a multimonth low of $187.63 in mid-February.

Open interest in live cattle contracts jumped 4,454 contracts to 367,767 contracts during Tuesday's session of higher prices, suggesting investors were making new bullish bets, CME Group data showed on Wednesday. That is the most cattle futures contracts in about three years.

Analysts said cattle have climbed this week in part on speculative tied to the Brazilian meat scandal, in which several buyers including China have halted imports of Brazilian meat amid an investigation into allegations of unsanitary conditions and corrupt practices.

However, many U.S. beef cuts were more expensive than Brazilian meat, limiting the potential for substitutes of U.S. supplies in global markets, Morrison said.

"With very few exceptions, there's no correlation. It's like trying to sell a Volkswagen to a Cadillac driver," Morrison said.

USDA in a monthly cold storage report said there were 502.43 million pounds of beef and 571.966 million pounds of pork in U.S. cold storage, compared to respective analyst estimates of 521.7 million pounds and 545.9 million pounds.

CME April feeder cattle futures settled 3.725 cents higher at 136.350 cents per pound.

CME April lean hogs were up 0.150 cents to 68.150 cents per pound. Most other deferred contracts lost ground, with most-active June hogs easing 0.575 cent to 75.750 cents.