April hogs closed moderately higher on the session yesterday. The market pushed higher into the mid-session as the market rose to a 4-session high. The lack of a futures premium to the cash market was thought to have provided support to the April contract. A recovery in the grain markets early in the session may have helped to lift the hog market higher, and continued strength in other commodities like metals and energy markets helped to strengthen the market. Poultry and beef supply is tightening and this may help to provide some support. Monthly export news for release later in the session may shed further light on demand levels. The CME Lean Hog Index as of February 7th came in at 87.66, down 5 cents from the previous session and down from 87.94 the week before. This leaves April hogs at a premium of 200 points, as compared with the 5-year average of near 500 points and nearly 1000 points last year. The estimated hog slaughter came in at 420,000 head yesterday. This brings the total for the week so far to 1.681 million head, up from 1.650 million head last week at this time and up from 1.665 million head a year ago. Pork cutout values released after the close yesterday came in at $84.82, down 23 cents from Wednesday and down from $84.95 the previous week. Cash market trading has been uneven across the country, which is thought to have kept the overall trading choppy and may suggests that some packers have larger orders to fulfill. Cash was mostly steady to $1.00 lower yesterday. Early projections for slaughter levels on Saturday are near 50,000 head as compared with 87,000 last week, as packer demand is thought to be sluggish due to weak margins.
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