June hogs closed lower on the session yesterday after being unable to sustain an early recovery rally. Projections for higher exports next year after the USDA supply/demand report showing exports for 2013 rising to 5.4 billion pounds from 5.305 billion pounds this year were thought to have supported the market early in the session. However, reports of heavy average hog weights and weakness in hams and ribs prices were thought to have pressured the market. Many traders remain concerned that the higher average weights are an indication that hogs are backed up in the country and that packer margins are still poor. However, pork cutout values released after the close yesterday came in at $80.12. That was up $1.96 from Wednesday and up from $78.10 the previous week, and is the highest pork market since late March as hams, ribs and loins were all up sharply. The estimated hog slaughter came in at 416,000 head yesterday, which was higher than expected and might suggest a jump in packer demand for live inventory. This brings the total for the week so far to 1.659 million head, up from 1.639 million head last week at this time and up from 1.585 million head a year ago. The CME Lean Hog Index as of May 8th came in at 79.74, down 23 cents from the previous session and down from 82.25 the week before.
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