February hogs closed slightly higher on the session yesterday, while April and June hogs posted new contract highs. Continued strength during the past week for pork product markets along with some threatening Midwest weather issues were thought to be the main supportive factors for the market. In addition, many traders see the dioxin issues with pork and poultry in Europe as a key factor which could lead to better pork exports from the US. South Korea has already banned meat from Germany, and there are ideas that Russia and other nations could do the same very soon. News that some tainted meat from Germany may have been sold has been another factor which might lead to higher export levels. Overnight, China suspended imports of pork and egg products from Germany. With positive packer profit margins, storms disrupting supply and a potential boost in exports, many traders see the market continuing to push to new highs. Snow followed by cold in the western Corn Belt may help pull average weights down from the higher levels seen recently. Traders also see icy conditions in North Carolina as a factor to slow marketings this week. Cash hogs traded steady on the session. The CME Lean Hog Index as of January 7th came in at 72.96, down 10 cents from the previous session and up from 72.07 the week before. This leaves February hogs at a 700 point premium for this time of the year which is wider than normal. The estimated hog slaughter came in at 391,000 head yesterday. This brings the total for the week so far to 781,000 head, down from 840,000 head last week at this time and down from 845,000 head a year ago. Pork cutout values released after the close yesterday came in at $81.18, up $1.52 from Monday and up from $77.46 the previous week. This is the highest pork trade since October 14th.
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