While the technical action appears somewhat toppy and traders remain concerned that pork values will not stay high for long, a continued surge in pork values, declining weights, heat in the forecast for the western Corn Belt and net buying from fund traders remain as short-term positive forces. July hogs traded lower on Friday and pushed back to their lowest level since Monday. Concerns that demand could sour into this week and talk that cutout values could peak soon helped to spark aggressive long liquidation selling early Friday, but firmer cash markets and the discount of futures to cash lent support. Pork cutout values, released after the close Friday, came in at $100.81, up $2.35 from Thursday and up from $94.12 the previous week. This is the highest it has been since August 26, 2011. A surge in loins, hams and fresh bellies more than offset a sharp break in rib prices. The CME Lean Hog Index as of June 20th came in at 100.50, up 1.53 from the previous session and up from 93.13 the week before. The estimated hog slaughter came in at 375,000 head Friday and 2,000 head for Saturday. This brought the total for last week to 1.954 million head, down from 1.957 million the previous week and down from 1.961 million a year ago. The Commitments of Traders reports as of June 19th showed non-commercial traders were net long 34,901 contracts, an increase of 7,720 for the week. The buying trend is a short-term positive force. Commodity index traders held a net long of 93,595 contracts, up 654. The monthly cold storage report was not quite as bearish as expected, but it still showed frozen pork supply at a record high for this time of the year and up 16% from last year. However, even with record pork production in May, the supply (636.1 million pounds) was down 4% from the previous month.
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