By Heather Schlitz

CHICAGO, July 5 (Reuters) - Chicago Mercantile Exchange live cattle futures closed higher on Friday as consumer demand for beef remains high and as U.S. cattle herds continue to undergo a period of contraction, traders said.

Livestock trade volume was light on Friday between the U.S. markets closure on Thursday for the Independence Day holiday and ahead of the weekend.

"Our biggest issue is this relentless rally in wholesale beef prices," Rich Nelson, strategist at Allendale said. "We're still holding these extreme gains, and consumers have yet to back away from beef."

The CME August live cattle contract settled up 0.5 cent at 186.425 cents per pound.

Though live cattle futures rose, August feeders finished down 1.90 cents at 261.475 cents per pound.

Wholesale boxed beef prices on Friday remained high, contradicting the seasonal slide in cash beef.

The choice boxed beef cutout price ticked up by 1.02 cents on Friday to $330.86 per hundredweight (cwt), according to data from the U.S. Department of Agriculture.

Meanwhile, benchmark CME August lean hog futures settled down 0.65 cent at 89.175 cents per pound, and October ended down 0.7 cent at 73.475 cents per pound.

Pork cutout values increased for all cutouts except for ribs, according to USDA data.

Traders cited weak demand from China, a major buyer of U.S. pork, where herds have been liquidated and the economy continues to recover following the pandemic.

"Hogs have quite a few problems," Nelson said. "This is a slack export environment. China is not buying aggressively and we're concerned we won't see them jump back into the market." (Reporting by Heather Schlitz; Editing by Shailesh Kuber)