U.S. lean hogs closed higher in all contracts Thursday amid support from a proposed deal reached between the U.S. and Mexico over a long-standing trucking dispute and on spillover from gains across most other commodity sectors.

April, the front month and current most-actively traded hog contract at the Chicago Mercantile Exchange advanced 0.55 cent, or 0.6%, to close at 88.80 cents a pound. June ended up 0.87 cent, or 0.9%, at $1.0067 a pound, its highest close for the week.

Referring to the trucking agreement announced by the Obama administration, Nick Giordano, vice president and Counsel, International Affairs for the National Pork Producers Council, said "this is very positive for the U.S. pork industry."

Lean hog traders viewed the news as positive for pork trade and supportive for prices as well. News of the trucking deal between the U.S. and Mexico pushed hog futures prices up further near midday, said Tom Cawthorne, vice president and hog futures trader with R.J. O'Brien.

A broker said the market was already firm from the outset on other factors but the news of the deal between the U.S. and Mexico generated additional buying interest that led to the strong close.

Mexico was number one in volume among international customers for U.S. pork in 2010 at nearly 546,000 metric tons and was second highest in value at almost $987 million, according to data compiled by the U.S. Meat Export Federation. Improving economies around the world, especially in developing countries, helped push U.S. pork exports up last year.

For the year, volume of pork and pork variety meats was up 3% from the previous year at nearly 1.918 million metric tons and worth $4.782 billion. Pork exports for 2011 are projected to be up nearly 11% from 2010 and set new all-time highs for volume and value, according to forecasts from the U.S. Department of Agriculture.

The National Pork Producers Council praised the Obama Administration for the proposed deal with Mexico to resolve the trucking dispute. "In August, Mexico put a 5% tariff on U.S. bone-in hams--a big export item--and 20% on cooked pork skins in retaliation for the United States not complying with the trucking provision of the 1994 North American Free Trade Agreement (NAFTA)," NPPC said in a release.

Cash hog prices were expected to trade mostly flat for the day and possibly into early next week. Supplies of slaughter-ready animals appear to be sufficient for the current operating schedules at the processing plants, said livestock dealers and market managers. Further ahead, hog supplies are expected to undergo seasonal tightening, and prices are seen moving up into the spring and summer.