April hogs closed sharply higher on the session yesterday and moved up to the highest price level since December 8th. A surge higher in cash bellies supported higher trade for pork cut-out late Tuesday, and the April contract is trading at a smaller than normal premium to the cash market. Some traders feel that it will be important to see continued strong export levels during the months just ahead in order to support a further rally for futures. Weekly average weights for Iowa/Minnesota for the week ending January 28th came in at 275.5 pounds, which was up from 275.3 pounds last week and 273.2 pounds last year. Weights typically decline at this time of the year but weather has been much warmer than normal. Slaughter came in a little below expectations at 417,000 head. This brings the total for the week so far to 1.234 million head, down from 1.280 million head last week at this time but up from 1.035 million head a year ago. Pork cutout values released after the close yesterday came in at $85.27, up 10 cents from Tuesday and up from $84.17 the previous week. The CME Lean Hog Index as of January 30th came in at 87.78, up 7 cents from the previous session and up from 85.66 the week before. This leaves April hogs at a premium of near 260 points, as compared with the 5-year average of nearly 600 points and last year when April was trading at a 1200 point premium.
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