Chicago Mercantile Exchange lean hogs on Wednesday shrugged off some of Tuesday's declines, helped by short-covering and rising prices for slaughter-ready, or cash, hogs, said traders.
December futures led advances after investors bought that contract and simultaneously sold deferred months in a trading strategy known as bull spreads.
Fund buying developed after some contracts topped technical resistance levels.
December hogs finished 1.575 cents per pound higher at 63.750 cents. February closed 0.850 cent higher at 68.000 cents, and above the 10-day moving average of 67.388 cents.
"The cash hog market was lower for 63 straight days. And then like flipping a light switch, we've been higher for almost three consecutive weeks," said Archer Financial Services broker Dennis Smith.
Analysts attributed the run-up in cash prices to still good, but slipping, packer margins as an incentive for packers to process as many hogs as possible.
Also the addition of four new packing into the mix has generated increased competition for hogs, they said.
However, packers may soon think twice about "chasing" hogs if their profits dip below $20 per head, and grocers begin featuring more beef after the end of October National Pork month, a trader said.
Live Cattle Turn Higher
CME live cattle finished higher on short-covering after some beef packers in the U.S. Plains raised bids for supplies, said traders.
October futures lagged behind other nearby months as investors await the bulk of this week's cash cattle sales.
October live cattle finished up 0.300 cent per pound to 111.475 cents. Most actively-traded December closed 0.675 cent higher at 116.650 cents.
On Wednesday morning some Plains processors hiked cash bids from $109 to $110 per cwt after a small number of cattle at the Fed Cattle Exchange brought $109. Remaining sellers are holding out for $113.
But some investors are skeptical whether Wednesday's futures gains will hold given seasonally lackluster wholesale beef demand and declining packer margins - the result of higher cash prices in recent weeks.
They also contend that market participants might exercise caution prior to the U.S. Department of Agriculture's monthly Cattle-On-Feed report on Friday.
Sell stops pressured back-month CME feeder cattle futures, but October was supported by mostly firmer live cattle contracts.
October ended up 0.375 cent per pound to 152.525 cents. November closed 0.350 cent lower at 152.075 cents, and January finished down 0.275 cent at 150.125 cents.