February hogs closed moderately lower on the session yesterday, with April hogs posting a new contract high earlier in the day before closing lower. Cash hogs traded steady to $1.00 higher which was seen as providing some support, but the market remains at a stiff premium to the cash market and higher than normal weights have been seen as an indication that short-term supplies may be higher than expected. The CME Lean Hog Index as of January 17th came in at 74.75, up 36 cents from the previous session and up from 72.93 the week before. This leaves February hogs at a higher than normal premium of 525 points for this time of the year. Pork values are near their highest levels since October, and this has some traders expecting higher cash trade ahead. Weekly average weights for Iowa/Minnesota for the week ending January 8th came in at a whopping 275.8 pounds, as compared with 274.7 pounds the previous week and 269.0 pounds last year. Large premiums of futures to cash could be enticing some producers to hold off on selling hogs that are ready for market. The estimated hog slaughter came in at 423,000 head yesterday. This brings the total for the week so far to 1.202 million head, up from 1.183 million head last week at this time but down from 1.221 million head a year ago. Pork cutout values released after the close yesterday came in at $86.01, up 95 cents from Tuesday and up from $82.18 the previous week. This is the highest level since October 4th.
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