June hogs closed moderately lower on the session yesterday as late selling emerged in a wide range of economically sensitive commodity markets due to a sharp rally in the US Dollar and weakness in global equities. Cash markets were steady to a little higher but many traders feel that a slower slaughter pace late this week or early next week will be a reason to expect some slower demand from packers. With positive price action for the June contract since Friday and strong upside follow-through in futures on Monday, some traders have projected that a seasonal low is at hand. Other traders feel that a further collapse in loin prices late yesterday and the weakest pork trade in 15 months does not provide confidence that the pipeline is moving better or that China or other nations are still actively importing US pork. In addition, packer margins are still in the red and the further weakness in pork this week will only leave reason for packers to drive down cash markets. Average weights are also higher than expected. The CME Lean Hog Index as of March 30th came in at 82.78, down 50 cents from the previous session and down from 85.77 the week before. The estimated hog slaughter came in at 417,000 head yesterday. This brings the total for the week so far to 833,000 head, up from 822,000 head last week at this time and up from 820,000 head a year ago. Pork cutout values released after the close yesterday came in at $78.42, down $1.53 from Monday and down from $80.40 the previous week. This is the lowest pork cut-out since January 6th of 2011.
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