Morning Hog Market Report for 4/15/2011

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June hogs closed sharply higher on the session yesterday and managed to trade up to new highs late in the session. The market traded moderately higher on the day into the mid-session led by a further advance in pork cut-out values late Wednesday with values at the highest since August and close to a record high level. Cash hogs were mixed with some locations up $1.00 and others steady to lower. Many traders see a declining production trend into the spring and seasonally stronger demand helping to hold the cash market trend higher in the weeks ahead. However, the premium of futures to the cash market is seen as a limiting factor. The market followed other agricultural markets lower overnight with increased concerns that China is likely to continue with tightening measures such as raising reserve requirements after a CPI reading of 5.4% released overnight with 1st quarter growth at 9.7%. Pork cutout values, released after the close yesterday came in at $96.00, down 31 cents from Wednesday but up from $94.28 the previous week. The all-time high was $96.74 set on August 24th, 2010. The estimated hog slaughter came in at 408,000 head yesterday which was well below expectations. This brings the total for the week so far to 1.636 million head, down from 1.653 million head last week at this time but up from 1.620 million head a year ago. The Lean Hog Index for the two days ending April 12th was 92.58. Actual US pork production for the week ending April 2nd came in at 439.9 million pounds, unchanged from the previous week and down 0.25% from a year ago. Slaughter during that same week was down 2.18% from last year, which shows the impact of the higher weights.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Commodities

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