CME lumber ends higher as cash continues up

CHICAGO Feb 2 (Reuters) - Higher cash prices this week closed Chicago Mercantile Exchange lumber futures higher on Tuesday, which followed limit gains on Monday, traders said.

* March and May both closed higher after posting limit gains of $10 per thousand board feet on Monday.

* March's gains were trimmed late by May/March spreading.

* CME traders on Tuesday reported cash lumber traded this week at $270 per tbf or more as buyers were having to pay higher prices for tight supplies.

* A number of lumber mills shutdown last year in reaction to poor sales caused by the drop in home building.

* Now retail lumber dealers, needing wood for the spring building season, are having pay more, traders said.

* The $270 tops the $252 quoted on Friday by the closely watched Random Lengths cash report.

* CME March lumber 2LBH0 closed up $2.50 at $261.00 per tbf, after peaking earlier in the session at $268.20. The May 2LBK0 closed up $4.30 at $283.00.

* Also supportive was a Realtor survey that showed pending home sales were up 1 percent in December. (Reporting by Bob Burgdorfer; Editing by Marguerita Choy)