Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange (CME) rose on Thursday to four-month highs as steady to firmer cash cattle prices signaled that meat packers may have largely worked through a backlog of market-ready cattle that built up this spring, traders said.

CME August live cattle futures settled up 1.975 cents at 103.275 cents/lb. after reaching 103.875 cents, the contract’s highest since March 5 (all figures US$). October live cattle rose 2.05 cents at 106.6 cents.

CME August feeder cattle futures settled up 3.175 cents at 142.6 cents/lb.

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Cash cattle traded as high as $97/cwt in Kansas this week, compared to $95 last week.

“Packers are not going to do anything out of the goodness of their heart. If they put better money on the table, it means they’ve got enough orders where they need the cattle,” said Dan Norcini, an independent livestock trader.

CME cattle futures tumbled in March and April as the coronavirus sickened workers at slaughterhouses, forcing several to close temporarily. Those shutdowns created a backlog of cattle in feedlots.

As the daily U.S. cattle slaughter recovered in May and June, beef supplies increased and wholesale prices fell, although values seemed to stabilize this week. Prices for choice cuts of boxed beef on Thursday afternoon rose four cents, to $200.80/cwt, while select cuts fell seven cents, to $191.30/cwt, according to USDA.

CME lean hog futures rose on fund-driven buying and expectations of firming cash hog markets. Traders shrugged off pressure from softer wholesale pork prices.

“Fund buying is becoming more robust in the meat pits today on ideas that we may have put the coronavirus lows behind us,” StoneX chief commodities economist Arlan Suderman wrote in a client note.

CME August lean hog futures settled up 3.5 cents at 53.65 cents/lb. and October ended up 2.4 cents at 51.825 cents.

USDA reported export sales of U.S. pork in the week to July 9 at 38,500 tonnes, up 16 per cent from the prior four-week average. Top global pork consumer China booked 8,000 tonnes and shipped 12,300 tonnes.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.