Chicago Mercantile Exchange (CME) live cattle futures set life-of-contract highs on Friday as a government report this week showing reduced US cattle supplies continued to inspire speculative buying, Reuters reported, citing traders.

A seasonal slide in wholesale beef prices capped rallies. But traders remained fixated on longer-term supplies after the US Department of Agriculture on Tuesday reported a 3% year-on-year drop in the size of the US cattle herd.

CME benchmark April live cattle futures settled up 0.300 cent at 164.125 cents per pound after posting a contract high at 164.225 cents. Front-month February live cattle ended up 0.525 cent at 160.275 cents after setting its contract high at 160.475 cents.

"The fundamentals are so bullish. With the tightening (cattle) numbers, people just want to be long cattle (futures)," said Dan Norcini, an independent trader.

CME feeder cattle futures closed higher as well, with the March contract finishing up 0.175 cent at 186.100 cents per pound. Several back months set contract highs.

In the beef market, the USDA on Friday priced choice cuts at $264.74 per hundredweight (cwt), down 36 cents from Thursday. Select cuts were down $2.05 at $251.61 per cwt.

Hog futures closed mostly higher, with most-active April hogs up 0.475 cent at 86.475 cents per pound, rebounding from a four-month low set on Wednesday. June hogs finished up 0.650 cent at 103.300 cents.

Still, cheap pork continued to anchor the futures market, with wholesale prices sputtering just above two-year lows set in mid-January. The USDA reported the carcass cutout on Friday afternoon at $79.09 per cwt, down $2.41 from Thursday's three-week high.

"We need to see the pork cutout take off to the upside. That will give people confidence to start coming in and buying those hogs," Norcini said.