July hogs closed higher for the 4th session in a row yesterday and are showing further strength overnight. The hog market followed other commodity markets lower early in the session yesterday and then managed to hold above Tuesday's lows and pushed slightly higher on the day into the close. A recovery in pork values late Tuesday and ideas that slaughter levels would decline helped to support. Cash hogs were lower and with the pork rally, packer margins may be improving from deep in the red but are still negative. Weights are still sharply up from last year and the 5-year average while the rally in the US dollar could discourage potential importers of US pork but many in the market see the seasonal decline in slaughter and the jump in pork values this week as positive short-term factors. Pork cutout values released after the close yesterday came in at $80.78, up $1.95 from Tuesday and up from $79.60 the previous week. This is the highest pork cut-out sine May 21st. Hams jumped $4.61 to $61.88. The CME Lean Hog Index as of May 25th came in at 84.98, down 28 cents from the previous session but up from 83.23 the week before. This leaves July hogs near a 300 point premium to the cash market. The estimated hog slaughter came in at 425,000 head yesterday. This brings the total for the week so far to 847,000 head, down from 1.252 million head last week at this time and down from 848,000 head a year ago. Weekly average weights for Iowa-Southern Minnesota as of May 26th came in at 274.3 pounds, down from 276.1 pounds the previous week and up from 269.9 pounds last year.
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