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July hogs have consolidated in a trading range since late March, and we believe the market will eventually break-out to the upside. Declining slaughter into the summer and a firm tone to exports are factors which should continue to support the cash market. The surge in pork cut-out values to 21-month highs this week helped boost packer profit margins, and this should spark higher cash markets next week. Cash is called steady today. The hog market closed slightly higher in quiet trade yesterday. The strong gains in pork cut-out values to the highest level since the summer of 2008 helped to support the market, while buying was limited due to steady to lower cash trade and weakness in cattle. Ideas that producers are cleaning up any backlog of hogs and a slight drop in average weights were seen as positive developments. The CME Lean Hog Index as of May 10th came in at 88.70, down 2 cents from the previous session and up from 85.90 the week before. The estimated hog slaughter came in at 397,000 head yesterday. This brings the total for the week so far to 1.165 million head, down from 1.188 million head last week at this time and down from 1.221 million head a year ago. Pork cutout values, released after the close yesterday, came in at $91.30, up 59 cents from Tuesday and up from $89.66 the previous week. This is the highest pork value since August 19th of 2008. Weekly average weights from Iowa/Minnesota for the week ending May 8th came in at 270.1 pounds, down from 270.5 the previous week and up from 269.4 pounds last year. Feeder Pig imports from Canada for the week ending May 1st came in at 82,643 head, down from 88,549 head the previous week and compared to a 4-week moving average of 90,279 head. Feeder pig imports for the year have reached 1.66 million head, down 7.5% from last year. Pork exports for March totaled 370.4 million pounds, up from 361.6 million in February and up 0.2% from last year. Exports represented 18.16% of the total production for the month.
TODAY’S GUIDANCE: The tightening supply into the summer and the recent pop in packer margins should help provide some underlying support.
TODAY’S MARKET IDEAS: Corrective breaks appear to be good buying opportunities as the cash market tone should improve into next week. Buying support for July hogs comes in at the 84.40-84.25 zone, with 86.35 as close-in resistance.
Hog Market Commentary – 2010.05.13
by Terry Roggensack on May 13, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
July hogs have consolidated in a trading range since late March, and we believe the market will eventually break-out to the upside. Declining slaughter into the summer and a firm tone to exports are factors which should continue to support the cash market. The surge in pork cut-out values to 21-month highs this week helped boost packer profit margins, and this should spark higher cash markets next week. Cash is called steady today. The hog market closed slightly higher in quiet trade yesterday. The strong gains in pork cut-out values to the highest level since the summer of 2008 helped to support the market, while buying was limited due to steady to lower cash trade and weakness in cattle. Ideas that producers are cleaning up any backlog of hogs and a slight drop in average weights were seen as positive developments. The CME Lean Hog Index as of May 10th came in at 88.70, down 2 cents from the previous session and up from 85.90 the week before. The estimated hog slaughter came in at 397,000 head yesterday. This brings the total for the week so far to 1.165 million head, down from 1.188 million head last week at this time and down from 1.221 million head a year ago. Pork cutout values, released after the close yesterday, came in at $91.30, up 59 cents from Tuesday and up from $89.66 the previous week. This is the highest pork value since August 19th of 2008. Weekly average weights from Iowa/Minnesota for the week ending May 8th came in at 270.1 pounds, down from 270.5 the previous week and up from 269.4 pounds last year. Feeder Pig imports from Canada for the week ending May 1st came in at 82,643 head, down from 88,549 head the previous week and compared to a 4-week moving average of 90,279 head. Feeder pig imports for the year have reached 1.66 million head, down 7.5% from last year. Pork exports for March totaled 370.4 million pounds, up from 361.6 million in February and up 0.2% from last year. Exports represented 18.16% of the total production for the month.
TODAY’S GUIDANCE: The tightening supply into the summer and the recent pop in packer margins should help provide some underlying support.
TODAY’S MARKET IDEAS: Corrective breaks appear to be good buying opportunities as the cash market tone should improve into next week. Buying support for July hogs comes in at the 84.40-84.25 zone, with 86.35 as close-in resistance.
Tags: Hogs, Livestock
About Terry Roggensack