April hogs made a run at new contract highs yesterday and managed to get there with a solid gain for the day. The market traded sharply higher for the session, with February pushing up to a new contract high in what was seen as a reaction to news that South Korea is dropping tariffs for 60,000 tonnes of pork imported through June. The deferred contracts also posted new contract highs followed by a lower close due mainly to weakness in the grain markets. Pork values continue to push higher, and the outlook for increased pork exports to South Korea before June is widely expected to help support the market during the next few months. Many traders see declining supplies and a short-term surge in exports as reasons to suspect a continued strong uptrend in cash prices. South Korea has culled near 25% of their hog herd due to foot and mouth disease, and some traders see a significant jump in imports this year as compared with imports of 290,000 tonnes last year. News that Russia has banned pork from Germany helped to spark a strong rally off of Monday's lows. Cash hogs are steady but pork values jumped higher again late Monday to the highest level since early October. Pork cutout values released after the close yesterday came in at $86.59, up 36 cents from Monday and up from $85.06 the previous week which is the highest pork trade since October 4th. The CME Lean Hog Index as of January 21 came in at 76.47, up 33 cents from the previous session and up from 74.40 the week before. The estimated hog slaughter came in at 425,000 head yesterday. This brings the total for the week so far to 845,000 head, up from 779,000 last week at this time and up from 764,000 a year ago.
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