Continued large slaughter levels could begin to turn the cash market trend down into mid-November but a minor bounce in pork overnight helped to support the market. The CME Lean Hog Index as of October 23rd came in at 85.03, up 16 cents from the previous session and up from 83.49 the week before. This leaves December at a discount of 690 points and a bit wider than normal.
December hogs closed just slightly lower on the session yesterday but stayed inside of Wednesday's range. The market traded moderately lower into the mid-session as a sharp break in ham vales, weakness in cattle and ideas that slaughter levels will stay high in the weeks just ahead helped to pressure. The weaker pork market had packers cutting bids in the cash market, and this may have helped spark some of the selling. Talk of the discount of futures to the cash market helped to provide some support. Cash traded steady to $1.00 lower.
Slaughter came in just under expectations at 432,000 head. This brings the total for the week so far to 1.735 million head, up from 1.731 million last week at this time and up from 1.718 million a year ago. Pork cutout values, released after the close yesterday, came in at $85.67, up 25 cents from Wednesday but down from $87.79 the previous week. Actual US pork production for the week ending October 13th came in at 486.1 million pounds, up from 478.3 the previous week and up 1.84% from a year ago. The previous three weeks to October 13th showed production increases from year-ago levels of 4.3%, 1.8% and 5.2%.
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