The market saw some follow-through buying support overnight after positive technical action yesterday even with continued signs that the cash market could struggle ahead. Perhaps the lower weight data and the discount of futures to the cash market is limiting the selling.
Pork cutout values, released after the close yesterday, came in at $85.42, down $1.99 from Tuesday and down from $88.71 the previous week. This is the lowest pork value since October 8th and the sharp set-back in hams was the main culprit today. Hams fell $6.36 to $71.21. December hogs closed slightly higher on the session yesterday after choppy and two-sided trade.
Cash markets were steady but some traders are a bit nervous about the possibility of higher production and weaker product markets ahead. Packer margins are in the black and December is at a discount to the cash and these factors have helped to support. The CME Lean Hog Index as of October 22nd came in at 84.87, up 21 cents from the previous session and up from 83.21 the week before and this leaves December at a significant discount.
The estimated hog slaughter came in at 434,000 head yesterday. This brings the total for the week so far to 1.303 million head, up from 1.300 million last week at this time and up from 1.289 million a year ago. Weekly average weights for Iowa-Southern Minnesota as of October 20 came in at 271.7 pounds, down from 272.2 the previous week and down from 273.3 pounds last year. Weights are still well above the 5-year average.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
Copyright CME Group All rights reserved.