February hogs climbed to the highest price levels since December 14th, although the market sold off later to close 20 lower for the session. Cash trade was mixed, but some of the terminals were higher and packer margins generally remain positive. Sluggish cash trade, continued weak pork product markets and higher than normal weights are all short-term negative forces. However, the shift to a smaller production base into the first quarter from the fourth quarter and a strong export outlook for 2012 are seen as positive longer-term forces. Warmer than normal weather has helped to push weights up during the holiday period but traders are also a bit concerned that some hogs may have been backed up during the past week. The CME Lean Hog Index as of December 23rd came in at 82.58, down 51 cents from the previous session and down from 84.86 the week before. The estimated hog slaughter came in at 432,000 head yesterday. This brings the total for the week so far to 868,000 head, down from 1.276 million head last week at this time and down from 1.218 million head a year ago. Pork cutout values released after the close yesterday came in at $86.02, down 27 cents from Tuesday and down from $86.50 the previous week. Weekly average weights for Iowa-Southern Minnesota as of December 24th came in at 275.7 pounds, up from 275.2 pounds the previous week and up from 274.3 pounds last year.
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