August hogs traded as much as 227 lower on the session yesterday but recovered late in the session to "only" close 45 points lower. The hog market saw aggressive selling from fund traders early in Tuesday's session, as the stalemate in Washington over the debt ceiling talks helped to spark increased selling. This came as a surprise to many traders who saw firmer cash, declining weights due to the weather last week and continued rumors of Chinese buying. A turn up in cattle prices and higher trade for grain prices helped to lift the market well clear of the recent lows. Pork cutout values released after the close yesterday came in at $101.31, up $1.03 from Monday and up from $99.30 the previous week. Loins and ribs were sharply higher as well. Cash hogs are expected to trade steady to $1.00 higher today after trading higher yesterday. The CME Lean Hog Index as of July 22nd came in at 97.50, up 1.02 from the previous session and down from 95.08 the week before. The estimated hog slaughter came in at 405,000 head yesterday. This brings the total for the week so far to 800,000 head, down from 814,000 head last week at this time but up from 765,000 head a year ago. China has set-up many new expansion projects for hogs due to the importance of pork to their economy and to their inflation readings. China already produces 55% of the world production and they could cover part of their short-term supply deficit with increased imports.
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