After near record slaughter for October, traders see a further increase in cold storage, which could push frozen pork stocks up for the sixth month in a row to yet another new record high for the end of October. Traders see pork stocks near 630 million pounds for the report for release after the close.
The technical action remains very impressive with February hogs in a decisive uptrend and posting new contract highs again yesterday. The jump in pork values and hams on Friday plus a turn up in outside market forces helped to support the run higher but traders remain concerned that "once" retailers are done purchasing hams for the holiday season that product could come under additional pressure. Pork cutout values, released after the close yesterday, came in at $81.27, down 36 cents from Monday and down from $84.12 the previous week. The 3.4% drop in pork prices for the week only adds to the negative margins for the packer and could spark further weakness in the cash market next week. This was the lowest pork value since October 1st and the weakness has been led by cash bellies but hams were down $1.11 yesterday to $64.24.
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