February hogs closed sharply higher on the session yesterday and managed a late rally to close near the highs. A shift in fund trader psychology was seen as a positive force as many traders feel that there has been a green light for commodity market investing at the start of the year. The sharp drop in the US dollar and a surge higher in energy, equity and metal markets also helped to support a more positive tone for commodity markets. There are widespread expectations for hog supply to be up near 2% from last year for 2012 but per capita available supply will be up near 1% from last year and available supply for beef and poultry will be down significantly. Cash hogs came in steady to $0.50 higher at terminals yesterday, which was widely seen to have added to the positive tone of the market. The CME Lean Hog Index as of December 29th came in at 81.54, down 23 cents from the previous session and down from 83.56 the week before. The estimated hog slaughter came in at 433,000 head yesterday. This brings the total for the week so far to 438,000 head, up from 436,000 head last week at this time but down from 833,000 head a year ago. Pork cutout values released after the close yesterday came in at $85.61, up 45 cents from Friday but down from $85.85 the previous week.
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