LIVESTOCK-CME hogs rally 2 pct, shrug off H1N1 flu

By Jerry Bieszk

CHICAGO, Nov 2 (Reuters) - U.S. lean hog futures rose 1.8 percent to a 3-1/2 month high on Monday amid a wave of buying by funds that extended across a range of commodities.

News that the pandemic H1N1 flu was found in a commercial swine herd in Indiana had no impact on futures.

The U.S. Agriculture Department said in a statement after pit trading had closed -- but when Globex trading was in progress -- that the pigs as well as caretakers had fully recovered from the flu, the first detected in a U.S. commercial herd.

"It's a nonevent," said Jim Clarkson, livestock analyst with A&A Trading Inc.

Funds accounted for much of the rally in futures during the day and the trend appeared to be holding in post-settlement electronic trade despite the H1N1 news.

"It's strong technically. Funds still get involved the first (trading day) of the month with new money coming into the market," said James Burns, independent hog trader. "There was also a lack of bad news. Everything is just kind of firm."

Traders cited talk that cash hogs would likely trade steady much of the week on good packer interest and they also cited a continued firm tone to the cash ham market. Commodities in general were also rallying today with a lower dollar seen helping to boost exports.

December lean hogs 2LHZ9 closed up 1.025 cents at 57.725 cents per lb and February 2LHG0 was up 1.000 at 64.600 cents. December posted a 3-1/2 month high and February moved above the 200-day moving average to set a four-month high.

Hog futures have been on an upswing since news last week that China will soon lift its ban on U.S. pork and word that African Swine Fever, a deadly hog disease, was spreading in Russia. [ID:nN28314175] [ID:nN29341577]

Live cattle futures also rallied late, but their run-up was attributed to cash cattle unexpectedly trading on a Monday.

Cash cattle traded steady at $88 per cwt in Texas and that sparked short-covering demand that lifted futures from early mixed trade. Although steady cash trade had been expected this week as cash cattle were seen topping, cattle trading on a Monday instead of later in the week surprised the market.

Last week, cash cattle traded higher at $87 to $88 per cwt in the southern Plains, and at $86 to $87 on a live basis and $135 on a dressed basis in Nebraska.

December live cattle 2LCZ9 ended up 0.550 cent at 86.225 cents per lb and February 2LCG0 was up 0.750 at 87.600.

A lower U.S. dollar and higher beef prices on Monday also provided support after early pressure from concern over the large amount of deliveries against October before it expired on Friday limit down.

USDA on Monday put the choice wholesale boxed beef price up 80 cents at $141.63 per cwt. [BEEF/BOX].