A surge in loin prices late yesterday and a continued positive tone for the cash markets has helped to support solid gains in the market overnight. Loins were up $4.79 to $93.48 and with a hefty short-term supply; traders suspect exports as a reason for the surge.
Pork cutout values, released after the close yesterday, came in at $84.95, up $1.84 from Wednesday and up from $80.28 the previous week. This is the highest pork value since August 24th.
The CME Lean Hog Index as of October 2nd came in at 77.76, up 96 cents from the previous session but down from 72.77 the week before. This left December hogs at a discount of 170 points. Actual US pork production for the week ending September 22 came in at 485.7 million pounds, down from 491 the previous week and up 5.22% from a year ago.
October hogs were trading at 77.00 on Monday morning and closed at 81.80 yesterday, and this has helped support solid gains in other months. April hogs tested contract highs on Wednesday and closed sharply lower on Wednesday and again yesterday.
December hogs closed slightly higher on the session yesterday with a 120 point range. The market traded near unchanged early but managed to rally to sharply higher on the day into the mid-session to erase all of Wednesday's losses. However, futures drifted back down into the close.
Cash hogs came in steady to $2.00 higher and the surge higher in other commodity markets with a weaker US dollar, strength in grains and strength in energy markets helped to support. Late weakness in the cattle market added to the weaker tone.
Slaughter came in below trade expectations at 431,000 head, which could suggest weaker packer demand. This brings the total for the week so far to 1.730 million head, down from 1.743 million last week at this time but up from 1.707 million a year ago.
*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.
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