April hogs closed slightly lower on the session yesterday but lifted 40 points off of the lows to avoid closing sharply lower on the day. News that some locations in the western Corn Belt traded lower in the cash market was seen as pressuring futures early, but other locations saw solid gains in the cash. While most agricultural markets were under selling pressure overnight, hogs prices moved as news from South Korea that the country would cut import tariffs on pork to zero for up to 60,000 tonnes through June were seen as the main fundamental support for the market. The South Korea news is widely expected to offset the impact of foot-and-mouth losses as well as help to fight inflation. South Korea imported 290,000 tonnes of frozen and chilled pork last year, mostly from the US and Canada. In addition, continued gains with pork cut-out values are seen as a positive force. Pork cutout values released after the close yesterday came in at $86.23, up 59 cents from Friday and up from $84.93 the previous week. This is the highest trade in pork values since October 4th and suggests for many traders that export demand was strong over the past few months. Some traders expect declining supply in the weeks ahead to hold the cash market in an uptrend, but hefty weights are seen as a limiting factor. Slaughter for last week was estimated at 2.166 million head which was down 0.5% from last year. However, higher than normal weights pushed estimated pork production for the week to 450.1 million pounds, up 1.5% from last year. The CME Lean Hog Index as of January 20 came in at 76.14, up 32 cents from the previous session and up from 73.57 the week before. The estimated hog slaughter came in at 420,000 head yesterday. This was up from 360,000 head last week and up from 361,000 head a year ago as this time.
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