July and August hogs closed sharply lower on the session yesterday as the market reacted negatively to the premium of futures over the cash market and concerns that cash markets might trade steady to a bit lower early this week. Packer margins are said to be in the red, which could push packer bids down. News that pork values were down late Friday added to the negative tone with pork cut-out down $1.20 to 81.48 led by weakness in loins and hams. Pork cutout values released after the close yesterday came in at $81.69, up 21 cents from Friday but down from $81.99 the previous week. A general perception that the export market is weak and that the Memorial Day buying is complete were seen to have pressured the market yesterday. Many traders are concerned that weaker exports will show up as extra frozen supply for the monthly Cold Storage report for release after the close. Slaughter came in at 418,000 head which was higher than expected and shows a little better than expected demand from the packer for live inventory. This was up from 403,000 head last week and up from 397,000 head a year ago as this time. The CME Lean Hog Index as of May 17th came in at 82.02, up 1.21 from the previous session and up from 79.35 the week before.