July hogs closed moderately higher on the session yesterday and was able to recover this week's early losses. A positive tone for the pork market late Monday and steady to higher cash markets yesterday were seen as helping to support the market. A firmer tone to the pork market for both trimmings and cash bellies also helped to provide some support. Hog futures are pricing in significant higher prices for the pork market and cash hog market during the next month. Many traders believe that the recent 4 to 5 weeks of higher than expected slaughter levels may be explained by more aggressive marketings, and that there could be a marketing hole just ahead. It is also possible that there could be more hogs available than was suggested by the most recent USDA March Hogs and Pigs report. The current slowdown in exports, a very large supply of frozen pork and much higher than normal average weights are all factors which could cushion the industry for a period of lower than expected slaughter levels.

Cash hogs traded steady to $0.50 higher but pork cutout values released after the close yesterday came in at $82.81, down 21 cents from Monday but up from $78.83 the previous week. Loin prices fell $3.47 to $105.02, which more than offset the rise in ribs and belly prices. Slaughter came in at just 404,000 head, which was below trade expectations. This brings the total for the week so far to 812,000 head, up from 422,000 head last week at this time and up from 800,000 head a year ago. The CME Lean Hog Index as of June 1st came in at 84.75, up 66 cents from the previous session and up from 85.26 the week before.