October hogs closed moderately higher on the session yesterday, finding support from higher pork values late Friday and from Friday's reversal-type price action. Cash hogs traded steady to $1.00 lower. A larger than expected drawdown of pork stocks for July was not enough to offset weaker pork values overnight. Packer profit margins are in the black, which might help to provide support under the market for the cash trade. If exports stay strong, some traders see a less than normal break in the cash market going into the fall. The monthly cold storage report showed frozen pork stocks at the end of July at 453.8 million pounds, which was down 8% from June but still up 16% from last year. The market normally sees a 5% decline in July so the 8% drop at this time of the year is considered supportive by many traders. The CME Lean Hog Index as of August 19th came in at 105.09, down 93 cents from the previous session and down from 107.77 the week before. The estimated hog slaughter came in at 418,000 head yesterday. This was up from 413,000 head last week and up from 407,000 head a year ago as this time. Pork cutout values, released after the close yesterday came in at $106.69, down 97 cents from Friday and down from $109.45 the previous week. This is the lowest pork price since August 2nd.
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