CHICAGO, June 14 (Reuters) - Chicago Mercantile Exchange (CME) live cattle futures rose on Monday, reaching a one-month top as falling prices for feed grains lifted feeder cattle futures, traders said.

CME August live cattle futures settled up 1.250 cents at 121.275 cents per pound after reaching 121.575 cents, the contract's highest since May 13.

August feeder cattle surged 3.425 cents to settle at 154.600 cents per pound, buoyed as Chicago Board of Trade corn futures tumbled nearly 4%, signaling lower prices for the key feed grain.

Optimism about rising cash cattle prices lent support, with some analysts expecting the supply of market-ready cattle to decline next month.

The market shook off pressure from a setback in wholesale beef prices, which have appear to have peaked after a three-month run-up. The choice boxed beef cutout value fell $2.09 to $335.47 per cwt on Monday and the select cutout dropped $1.80 to $303.41 per cwt, according to the U.S. Department of Agriculture (USDA).

"The feeling is that the cash cattle market typically bottoms the last two weeks of June. The (cattle) numbers look like they start to tighten as we get into July, just from the (USDA feedlot) placement numbers. That is giving us some buying," said Don Roose, president of Iowa-based U.S. Commodities.

As beef prices ease, packer margins have retreated slightly but remain historically strong at an estimated $875.45 per head, according to advisory service HedgersEdge.com. The latest margins are down from $900.70 a week ago but well above year-ago levels near $325 a head.

CME July lean hog futures fell on Monday for a fifth straight session on profit-taking after last week's contract highs and uncertainty about demand for U.S. pork from China, where hog prices are falling.

"The fear is if China's demand slows down," Roose said.

China's state planner said last week that it aimed to use state reserves of pork to stabilize hog production and prices, after a more than 50% plunge in pork and hog prices since the beginning of the year.

CME July hog futures settled down 1.750 cents on Monday at 118.225 cents per pound and August futures fell 2.175 cents to end at 114.800 cents. (Reporting by Julie Ingwersen; Editing by Aurora Ellis)