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Cash pork prices continue to advance, providing strong incentive for packers to keep bidding for cash hogs. On top of that, hot weather in the Midwest is expected to limit marketings, which make packers more aggressive in their buying. Pork cutout values were up another 12 cents after the close yesterday, and while that gain is not as strong as some of the $1-plus gains of the past week, it took cutout prices to their highest levels since June 1st! August hogs closed slightly higher on the session yesterday, but well off of the early highs. Weakness in other commodity markets and the outlook for cash to trade steady to $1.00 lower today helped to pressure the market later in the day. Packers appear to have the hogs they need for the week, and some plants will see downtime on Friday and Monday. August hogs still hold a premium to the cash market so if cash is weak, we could see a bit more long liquidation selling from the funds before the market stabilizes. The market saw strong gains early yesterday, due to news of higher pork prices late Monday. In addition, cash hogs came in steady to $1.00 higher yesterday despite expectations for only a steady trade. The CME Lean Hog Index as of July 23rd came in at 80.81, up 98 cents from the previous session and up from 77.90 the week before. The estimated hog slaughter came in at 378,000 head yesterday, which was below trade expectations and is sometimes considered a sign of weaker packer demand. This brings the total for the week so far to 764,000 head, down from 770,000 head last week at this time and down from 832,000 head a year ago. Pork cutout values, released after the close yesterday, came in at $86.86, up $0.12 from Monday and up from $84.03 the previous week.
TODAY’S GUIDANCE: Packer margins are in the black, and pork demand appears to be much better than traders have expected. Exports appear active, and traders expect continued tight supply ahead. October hog support is at 75.55 and 75.12, with 77.37 and 78.75 as the next upside targets. Look for the choppy to higher trade to continue.
Hog Market Commentary – 2010.07.28
by Terry Roggensack on July 28, 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!
Cash pork prices continue to advance, providing strong incentive for packers to keep bidding for cash hogs. On top of that, hot weather in the Midwest is expected to limit marketings, which make packers more aggressive in their buying. Pork cutout values were up another 12 cents after the close yesterday, and while that gain is not as strong as some of the $1-plus gains of the past week, it took cutout prices to their highest levels since June 1st! August hogs closed slightly higher on the session yesterday, but well off of the early highs. Weakness in other commodity markets and the outlook for cash to trade steady to $1.00 lower today helped to pressure the market later in the day. Packers appear to have the hogs they need for the week, and some plants will see downtime on Friday and Monday. August hogs still hold a premium to the cash market so if cash is weak, we could see a bit more long liquidation selling from the funds before the market stabilizes. The market saw strong gains early yesterday, due to news of higher pork prices late Monday. In addition, cash hogs came in steady to $1.00 higher yesterday despite expectations for only a steady trade. The CME Lean Hog Index as of July 23rd came in at 80.81, up 98 cents from the previous session and up from 77.90 the week before. The estimated hog slaughter came in at 378,000 head yesterday, which was below trade expectations and is sometimes considered a sign of weaker packer demand. This brings the total for the week so far to 764,000 head, down from 770,000 head last week at this time and down from 832,000 head a year ago. Pork cutout values, released after the close yesterday, came in at $86.86, up $0.12 from Monday and up from $84.03 the previous week.
TODAY’S GUIDANCE: Packer margins are in the black, and pork demand appears to be much better than traders have expected. Exports appear active, and traders expect continued tight supply ahead. October hog support is at 75.55 and 75.12, with 77.37 and 78.75 as the next upside targets. Look for the choppy to higher trade to continue.
Tags: Hogs
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