LIVESTOCK-Hogs rise 1 pct on Russia news, fund buying

By Jerry Bieszk

CHICAGO, July 6 (Reuters) - U.S. lean hog futures rose more than 1 percent on Monday to a one-month high amid fund buying, Russia lifting some of its bans on U.S. meats and expectations that beef prices may have hit bottom.

After hovering near a six-year low most of the past two weeks, the wholesale price for pork cutout as measured by the U.S. Agriculture Department rose on Thursday.

Further gains are seen in the cutout value following Russia's decision to lift a bank on live pigs and uncooked pork imports from Illinois, New Jersey, Pennsylvania and Texas amid improvement to the H1N1 flu outbreak situation.

Illinois is a major pork producing state.

"There's further thoughts the bottom is in and technically they look pretty good after that real strong performance last week, so you got some follow-through fund buying in the hogs," said Peter Adams, a principal at PNM Trading.

Adams noted some buy stops were hit on the early advance.

Traders said improved optimism over cash markets was partly due to meat packers willing to pay steady to higher prices for hogs despite their margins being well in the red.

Packer margins were at a negative $10.45 per head on Monday, compared with a negative $11.65 on Thursday and negative $7.75 a week ago, according to HedgersEdge.com.

July lean hogs 2LHN9 closed up 0.675 cent at 60.650 cents per lb and August 2LHQ9 was up 0.900 at 62.050 cents. July set a two-week high and August a one-month high early.

A major fire at Smithfield Foods Inc (SFD.N) Patrick Cudahy meat packing plant in Wisconsin had little effect on futures.

Smithfield said in a statement the company's other facilities would be able to make up any product shortfalls in short order, minimizing any disruption. [ID:nN06262767]

Live cattle futures ended lower amid further pressure from a weak economy, concern that retail beef sales were slow over the July 4th holiday weekend and a higher dollar likely slowing beef exports. Demand for beef is being reduced by the highest unemployment in 26 years.

Traders also voiced concern that cash cattle markets may be under pressure despite tight feedlot supplies and higher cash cattle prices last week. Packer profit margins are slipping and demand for grilling meats slacken going in the heat of summer.

"They did trade $83 last week but now we are into typically a slow period" of beef demand, Adams said.

Cash cattle traded $1 to $1.50 higher in the southern Plains at $83 to $83.50 per cwt last week.