The lower close after the early rally to a new high for the move yesterday could leave the market vulnerable to some short-term weakness. Positioning ahead of Friday's USDA report could keep the trade choppy into Friday's close.
Pork cutout values, released after the close yesterday, came in at $82.70, down 16 cents from Friday but up from $82.54 the previous week. The stability in pork is seen as somewhat supportive as traders see cash markets working higher into late January as slaughter levels begin to decline. The USDA data is showing a record high drop in pork production from the 4th quarter to the 1st quarter. The USDA Hogs and Pigs report for Friday, however, is expected to show only modest liquidation of the herd after the summer drought. Traders see total pig supply on December 1st near 99.3% of last year for the report Friday with some showing a decline of more than 1% and a one analyst showing a supply higher than last year.
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