December hogs closed slightly higher for the session yesterday, for the fifth consecutive daily gain in a row. A steady cash market was widely seen as a positive factor for the market with many dealers indicating firmer demand from packers. February hogs were also higher and posted contract highs for the third session in a row yesterday. Rising pork cut-out values late Monday along with strength in the cash market were also thought to have helped support the market.
There has been further that China is now a much more active importer of US pork. If that proves to be the cast, the steady flow of product to China, Japan and other key import nations may help to cushion the negative price impact of a seasonal increase in production expected during the months ahead. China's pork prices have moved lower during recent weeks, as many traders feel that this may be an indication that their import activity may be on the rise. Packer margins have improved so far this week but a drop in loin and rib prices yesterday may concern traders who are hoping for a steady stream of exports to support pork product markets. The estimated hog slaughter came in at 429,000 head yesterday. This brings the total for the week so far to 861,000 head, up from 852,000 head last week at this time and up from 844,000 head a year ago. Pork cutout values released after the close yesterday came in at $98.24, down 82 cents from Monday but up from $96.92 the previous week. The CME Lean Hog Index as of October 14th came in at 93.54, down 8 cents from the previous session and down from 93.77 the week before. This leaves December hogs with nearly a 350 point discount to the cash market.