The USDA report on Friday afternoon was slightly positive to the market but the weight breakdown shows that slaughter numbers in the next few months should still run 1-1.5% above last year. A mild winter leaves the market supply high and record high pigs per liter into the spring leaves adequate supply into the fall. With near 25% of US production on the export market, exports will still be a major factor for prices. The less fearful outlook for the global economy late last week was therefore a positive force. The USDA reported All Hogs and Pigs on June 1st at 100.8% of last year, which was near the low end of expectations. Traders were looking for near 101.3% of last year. The breeding herd came in at 101% of last year, which was near the high end of expectations and considered negative for the deferred contracts. Kept for Marketing supply was 100.8%, which was right on the low end of expectations and considered somewhat positive. The heaviest weight group is hogs, which are mostly marketed by now, so the 100.5% reading shows the recent marketing whole for much of June. However, producers will soon begin to move hogs on the market from the 120-179 pound category, and this came in showing supply at 101.4% of last year and the 50-119 pound category was 101.2% of last year. This data is somewhat bearish against the August and October hogs. August hogs closed 87 higher on the session Friday and pushed to the highest level since April 9th ahead of the report. Funds turned more active buyers as most commodity markets found strength from the sharp rally in the stock market and a collapse in the US dollar. The CME Lean Hog Index as of June 27 came in at 102.65, down 43 cents from the previous session but up from 100.50 the week before. This leaves August at a significant discount to the cash market. The estimated hog slaughter came in at 402,000 head Friday and 2,000 head for Saturday. This brought the total for last week to 1.999 million head, up from 1.954 million the previous week and up from 1.960 million a year ago. Pork cutout values, released after the close Friday, came in at $95.43, down 72 cents from Thursday and down from $100.81 the previous week. High temperatures and high humidity moved to the East Coast this past weekend and could be seen as a negative demand force. On the other hand, Midwest temperatures are still high this week and should keep producer marketings slow. The Commitments of Traders reports as of June 26th showed non-commercial traders were net long 34,355 contracts, a decrease of 546 for the week. Non-commercial and nonreportable traders combined held a net long of 17,194 contracts, down 2,216 for the week. Commodity Index traders held a net long of 94,191 contracts, up 596. The COT report news is somewhat neutral to the short-term outlook.