U.S. lean hogs rallied Thursday on strong wholesale prices, export demand and outside market support.

A big jump in wholesale pork prices Wednesday fueled futures, boosting packer margins, analysts said. The market was also fueled by talk of increased pork exports, particularly to Russia, analysts said.

Chicago Mercantile Exchange lean hogs for July were up 1.125 cents, or 1.2%, to 97.15 cents per pound. August lean hogs, the most active contract, were up 2.675 cents, or 2.9%, to 96.275 cents a pound.

The gains were also driven by the gains in equities. Overall, meat demand should continue to improve in 2011, Goldman Sachs said Thursday. However, it lowered its six-month price outlook for lean hogs to 95 cents per pound, down 10 cents, as a larger-than-expected U.S. hog herd hangs over the market.

Cash hog prices, which have helped lift futures, were reported mostly steady to weaker. Several processing plants have sufficient numbers of hogs booked through the middle of next week, yet prices were little changed overall, said livestock dealers and market managers.

Lighter carcass weights and seasonally reduced supplies of slaughter-ready animals are helping prop up cash hog prices.

The USDA's pork carcass composite value, a measure of wholesale prices, on Wednesday gained $1.19 to $97.39 per hundred pounds.

The terminal markets traded steady to down $1 a hundred pounds with top prices at mostly $65 per hundred pounds on a live basis.