April hogs closed moderately lower on the session yesterday but close to the lows of the day. Weakness in the grain markets, a setback in cattle prices and a turn from positive to negative for outside market forces was thought to have pressured the market. Outside market forces look negative again for today but a surge higher in pork cut-out values was enough to support a move to the highest level since February 3rd. A sharp rally in ham and loin values posted late yesterday also helped to lift the market sharply higher overnight. This rally could encourage improved demand for live inventory from packers, and could help to boost cash hog values into next week. Cash markets were steady, while pork product prices jumped to the highest level for the year in late trading Tuesday.
Weekly average weights for Iowa/Minnesota for the week ending February 11th came in at 275.9 pounds as compared with 275.4 pounds last week and 272.9 pounds last year. Weights typically decline at this time of the year but the moderate winter has allowed for better than normal weight gain. The CME Lean Hog Index as of February 13th came in at 87.36, down 10 cents from the previous session and down from 87.71 the week before. This leaves April at a premium of just 155 points, as compared with the 5-year average premium of 437 points for this time of the year. The estimated hog slaughter came in at 420,000 head yesterday. This brings the total for the week so far to 1.263 million head, up from 1.261 million head last week at this time and up from 1.243 million head a year ago. Pork cutout values released after the close yesterday came in at $88.21, up $2.41 from Tuesday and up from $85.05 the previous week. This is the highest pork cut-out since December 19th, 2011.