February hogs closed sharply higher for the session yesterday, but were unable to move above the September 21st contract highs. April and June hogs were sharply higher into the mid-session with April posting contract highs in each of the past five trading sessions. Much stronger corn prices following the USDA reports were thought to have pushed the hog market sharply higher, as many traders do not believe producers will slow production and liquidate breeding stock at this point. The short-term cash fundamentals are widely seen as remaining positive and with large packer margins now are thought to be holding the trend in cash prices higher. A move higher in loin prices and positive packer profit margins have been seen as reasons to forecast higher cash markets during the days ahead. Cold and snowy weather in the US as well as disease issues in Europe and South Korea are widely seen as factors which could support better exports levels ahead. In the USDA supply/demand report, 2011 pork production was revised down by 25 million pounds, which was offset by a downward adjustment of 60 million pounds for 2011 exports. These may be relatively small numbers, however, when considering that weekly pork production is nearly 450 million pounds. Exports for 2011 are still projected to be up 9.1% from last year. The CME Lean Hog Index as of January 10th came in at 72.93, down 3 cents from the previous session and up from 72.48 the week before. This leaves February hogs at a premium of 820 points to the cash market as compared with a normal premium of between 200 to 300 points for this time of the year. The estimated hog slaughter came in at 416,000 head yesterday. This brings the total for the week so far to 1.183 million head, down from 1.261 million head last week at this time and down from 1.270 million head a year ago. Pork cutout values released after the close yesterday came in at $82.18, up $1.00 from Tuesday and up from $77.95 the previous week. The loin market was down but cash bellies saw a sharp rise in price. This is the highest pork cut-out trade since October 12th. Weekly average weights for Iowa-Southern Minnesota as of January 8th came in at 275.8 pounds, up from 274.7 the previous week and up from 269.0 pounds last year.