CHICAGO, March 28 (Reuters) - Chicago Mercantile Exchange cattle futures on Thursday extended a recovery from two-month lows reached this week, as cash prices declined less than expected, analysts said.

Traders and producers watched the cash market closely to see whether it would crumble after futures recently came under pressure from fund selling, larger-than-expected U.S. feedlot placements in February, and concerns over detections of avian flu in dairy herds.

"Cash cattle was not as low as it could have been," said Rich Nelson, chief strategist for brokerage Allendale.

Fed cattle in Nebraska traded at $189 per hundredweight on a live basis in the cash market, down $1 from last week, Nelson said. Cash trading was light earlier, with some cattle trading in the southern U.S. at $184 to $186 per cwt on Tuesday, according to broker StoneX.

"That $184-$186 business is all down from a $188 market last week, though of course not as weak as futures have been," StoneX said.

CME June live cattle finished 1.575 cents higher at 180.250 cents. The contract fell 1.5% for the week and 0.5% for the month but jumped 6% during the first quarter.

CME May feeder cattle ended 0.425 cent higher at 248.700 cents per pound on Friday. The contract sagged 2% for the week, its fifth consecutive weekly decline.

"The most bullish thing that I've observed this week is the reluctance in the cash markets today," said Ross Baldwin, hedge strategist for AgMarket.Net.

After trading ended, the U.S. Department of Agriculture said the U.S. hog herd on March 1 totaled 72.9 million head, up 0.6% from a year earlier. Analysts expected little change.

"Light breeding-herd liquidation has been more than offset by high pigs per litter efficiency gains," Nelson said.

The USDA separately said weekly U.S. pork export sales for 2024 were a marketing-year high and up 74% from the prior four-week average.

CME June lean hog futures slipped 0.150 cent to 101.450 cents per pound, but were up 13% for the quarter.

Markets will be closed on Friday. (Reporting by Tom Polansek)