August hogs recovered some of yesterday's losses overnight, as the dollar eased slightly, grain prices were lower and average weights dropped significantly. Weekly average weights for Iowa-Southern Minnesota as of June 30 came in at 270.0 pounds, down from 281.4 the previous week and up from 267.6 pounds last year. This happened even before the worst of the hot weather, so it is possible we will see further reductions next week. This means tighter near term supply, which is positive to the market. The eastern half of the country is expected to see a cool-off to more normal temperatures late this weekend into next week, but west of the Mississippi still looks quite warm. This may open up a backlog of hog marketings in the east, but the lower weights may limit the number of hogs going to market. August hogs sold off sharply yesterday, to their lowest level since June 28th. Sharply lower wholesale pork prices ahead of the July 4th holiday and a soft tone to the cash live hog market pulled pressured the futures market, and a big rally in the dollar raised concerns over the outlook for US pork exports. The CME Lean Hog Index as of July 2 came in at 101.37, down 39 cents from the previous session and down from 102.79 the week before. The futures discount to the cash index is positive. The estimated hog slaughter came in at 422,000 head yesterday. This brings the total so far in this holiday shortened week to 1.267 million head, down from 1.595 million last week at this time but up from 1.263 million a year ago. Pork cutout values, released after the close yesterday, came in at $90.64, down 92 cents from Tuesday and down from $99.56 the previous week. This is the lowest the cutout has been since June 13th.
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