Chicago Mercantile Exchange live cattle futures rallied Wednesday as the wholesale beef price, or cutout, moved sharply higher, said analysts and traders.

Wednesday’s beef cutout value jumped to a 10-year high with the arrival of warm, dry weather over much of the country, which analysts believe will boost outdoor cookouts.

The wholesale price choice beef on Wednesday rose $3.10 to $199.49 per hundredweight (cwt), the highest since $200.65 on Oct. 20, 2003, according to the U.S. Department of Agriculture (all figures US$).

CME live cattle drew additional support from June contract’s discount to Wednesday’s steady-to-higher cash cattle prices.

So far, cash cattle in Texas and Kansas traded at $128/cwt, steady with last week, said feedlot sources. The June futures closed at the equivalent of $122.75. Nebraska cash cattle moved at mostly $130, steady to up $2 from a week ago.

“Packers showed their hand by bidding too early in the week. And sellers were not going to let cattle go at a loss with beef demand on fire,” a feedlot manager said.

The fundamental-led advances took June and August live cattle above their respective 40-day moving averages of 122.11 and 123.02 cents, which stirred fund buying.

June ended at 122.475 cents, up 0.575 cent. August closed up 0.55 cent at 123.1 cents.

May and August CME feeder cattle futures closed lower pressured by their premiums to the exchange’s feeder cattle index which was at 135.97 cents. Other contracts kept pace with the higher live cattle market.

May feeder cattle closed at 139.5 cents, down 0.05 cents/lb. And August finished at 148.725 cents, 0.175 cent weaker.

Hogs snap back on cash

Higher cash hog and wholesale pork prices lifted nearby CME hog futures to a 2 1/2-month high, analysts and traders said.

CME June hogs settled 0.375 cent higher at 92.950 cents per lb and July hogs closed at 92.975 cents, up 0.075 cent.

Packers raised cash hog bids as demand for pork improved, but higher cash hog prices are wearing down their margins, a trader said.

The average hog price on Wednesday in the most-watched Iowa/Minnesota market was $87.74/cwt, $1.85 higher than on Tuesday, USDA said.

U.S. pork packer margins on Wednesday were estimated at a negative $3.50 per head versus a positive $4.50 on Tuesday and a positive $11 a week ago, according to HedgersEdge.com.

USDA’s Wednesday afternoon mandatory wholesale pork price, calculated on a plant-delivered basis, was $87.89/cwt, up $1.17 from Tuesday.

— Theopolis Waters writes for Reuters from Chicago.