As the short-term focus shifted to declining weights and a stiff discount to the cash market, hogs found some active buying support yesterday. While the heat next week may slow marketings and impact weights, weights are not abnormally low, and the weather is also seen as bearish to consumer demand. Higher grain prices may also encourage a little more slaughter than traders have anticipated. Pork cutout values, released after the close yesterday, came in at $89.51, down 6 cents from Wednesday and down from $90.64 the previous week. This is the lowest pork trade since June 13th. August hogs gave back all of the gains from yesterday with weak action overnight, and October hogs pushed down to the lowest level since June 27th. August hogs had managed to close higher yesterday but were well off of the mid-session peak. A lack of new selling interest seemed to be the key supportive force, but the stiff discount to the cash market also helped. Ideas that reduced marketings next week could support a bounce in the cash helped to support. Fears of declining weights and sharply reduced marketings next week due to heat and the discount were all seen as positive forces. Fears of weak demand and sluggish exports have helped to pressure the futures market in recent days. Packer margins are still poor and traders see higher corn values as a short-term bearish force. The CME Lean Hog Index as of July 10 came in at 99.84, down 58 cents from the previous session and down from 101.37 the week before. The estimated hog slaughter came in at 393,000 head yesterday. This brings the total for the week so far to 1.571 million head, up from 1.267 million last week at this time but down from 1.622 million a year ago.
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