The hog market traded moderately higher on the day early yesterday, but gave back much of those early gains and traded both sides of unchanged. The collapse in other commodity markets as well as the US stock market also was thought to have pressured the market. August hogs pushed to a new contract high and to new all time highs for nearby futures to 106.02, led by steady to $1.00 higher trade in cash markets and new all-time highs for pork cut-out values for the seventh day in a row. The market was down overnight as many traders feel that the late action in the stock market and weakness in pork will be negative forces today. Pork cutout values released after the close yesterday came in at $108.10, down 21 cents from Wednesday but up from $104.18 the previous week. Loins were down $1.35 to $127.40 but are still up from $124.42 last week. Concerns that a weaker economy could slow pork demand as well as ideas that pork exports could also decline were also seen as negative factors for the market. October hogs managed to be one of the few commodity markets to close higher on the session yesterday, as the surge higher in the cash market and ideas that Asian import activity is picking up at the same time that traders generally expect a seasonal decline in the cash market were thought to have supported. The CME Lean Hog Index is at 104.45, which leaves October at a significant discount to the cash market. With average weights well below their 5-year average, near-term production may be lower than expected. The CME Lean Hog Index as of August 2nd came in at 104.45, up 1.11 from the previous session and up from 99.33 the week before. This leaves October hogs at a 1170 point discount to the cash market as compared with the 5-year average basis of 482 points for this time of the year. The estimated hog slaughter came in at 403,000 head yesterday. This brings the total for the week so far to 1.556 million head, down from 1.610 million head last week at this time but up from 1.555 million head a year ago.
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