June hogs closed 137 lower on the session Friday and down 282 points for the week. The market gave back nearly all of the strong gains from Thursday to close near the lows of the week. Ideas that China will be actively buying pork for movement into government cold storage reserves left many traders believing that Chinese import demand will decline, which was seen as a negative factor for the market. There are indications that China does not want to see their producer margins dip into the red and are attempting to stabilize prices. A jump in ham prices helped to hold the pork cut-out market from eroding further on Thursday and the cash market was seen to be steady on Friday. There were ideas during the session that poor export demand could spark higher than expected cold storage stocks in the monthly report. However, end of March frozen pork stocks came in at 612.6 million pounds, which was down 2% from the previous month but up 7% from last year. Normally, frozen stocks decline by 1% for the month so the 2% decline was considered to be slightly supportive for the market. While the pork news was not as bad as feared from the cold storage report and for the daily pork cut-out trade after the close Friday, outside market forces are widely thought to be negative this morning. Pork cutout values released after the close Friday came in at $78.09, up 63 cents from Thursday and up from $77.01 the previous week and up to a 10-day high. Fresh belly prices recovered after a sharp break earlier last week. The CME Lean Hog Index as of April 18th came in at 82.65, up 6 cents from the previous session and up from 82.44 the week before. The estimated hog slaughter came in at 413,000 head Friday and 9,000 head for Saturday. This brought the total for last week to 2.084 million head, up from 2.044 million head the previous week and up from 2.060 million head a year ago.
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