February hogs closed slightly higher on the session yesterday but were able to post the highest close since December 23rd. The market saw some early strength from outside market forces led by a weaker US dollar and strength in grains, gold, crude oil and equity markets. The rally off of last week's lows suggests for some traders that a seasonal low may be close at hand. Those traders feel that the market has absorbed a large base of production for the fourth quarter of 2011 and the shift to a smaller production base during the first quarter of 2012 may be a factor to help support a rise in prices into the spring. A jump in loin prices yesterday supported higher pork cut-out values, which could help to support the cash market. Cash trading was considered sluggish, with some terminals reporting prices at steady to $0.50 lower. Record high November pork export levels from the US announced last week helped to provide some underlying support for the market. The CME Lean Hog Index as of January 12th came in at 84.46, up 30 cents from the previous session and up from 82.37 the week before. The estimated hog slaughter came in at 426,000 head yesterday. This brings the total for the week so far to 802,000 head, down from 850,000 head last week at this time but up from 778,000 head a year ago. Pork cutout values released after the close yesterday came in at $84.93, up 48 cents from Monday and up from $83.58 the previous week.
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