July hogs sold off sharply yesterday but then made a strong recovery off of those early lows. July hogs were down as much as 190 points on the day as weak outside market forces and a negatively-received cold storage report were seen to have pressured the market. Some traders continue to look for a seasonal decline in hog slaughter to encourage higher pricing, but a combination of higher than expected weights and much higher than expected cold storage supply going into the summer has helped to pressure hog futures recently. However, these factors could help to cushion the near-term pork supply if seasonal slaughter begins to decline into June and July. A strengthening US dollar as well as reports of a slowdown in China's import demand have added to the negative tone of the market, as sluggish exports combined with the current premium of hog futures to the cash market may lead to a slower movement of pork through the pipeline. This is a likely cause of cold storage stocks rising sharply higher, and has also left average slaughter weights much higher than normal. The USDA Cold Storage report showed end of April frozen pork stocks at 659.5 million pounds, which was up 20% from last year and up 8% from the previous month. The news was considered negative for hog futures, as pork stocks typically increase by 2% in April. Ham supplies were up 46% from last year, which could have been a function of slower exports to Mexico. The average weight for barrows and gilts in Iowa/Minnesota for the week ending May 19th came in at 276.1 pounds, down from 276.5 pounds the previous week but still up from 270.9 pounds from last year. Last year's weights were higher than normal and recent data suggests that if slaughter totals are equal to last year, pork production will be higher. The CME Lean Hog Index as of May 21 came in at 84.20, up 97 cents from the previous session and up from 79.36 the week before. The estimated hog slaughter came in at 417,000 head yesterday. This brings the total for the week so far to 1.252 million head, up from 1.232 million head last week at this time and up from 1.222 million head a year ago. Pork cut-out values were down 96 cents to 78.64, as compared with 82.68 last week, near 90.00 last year and near 87.00 two years ago at this time. Ribs were down $7.39 to $135.34 from $148.23 last week.