October hogs closed sharply lower for the session yesterday, falling down to the lowest level since July 6th. Ideas that there will be a seasonal increase in production into the fall helped to pressure the market. Cash hogs traded mixed with a higher tone in the east and a lower tone for the west. A setback in pork cut-out values from record highs the previous session helped to pressure the market as well. Some traders feel that with the Lean Hog index at 107.42, it may be difficult to find new aggressive sellers of October futures at 86.75.
Forecasts for cooler weather, higher weights and increasing slaughter pace ahead have been seen as negative factors, while there are possibilities that China and Taiwan continue to be aggressive importers of US pork and that temperatures jump back up to the 90's in Iowa late next week. There are ideas that cash markets may move lower today but packer margins are in the black and loin prices jumped to another new high of $132.10 from $127.40 last week. Pork cutout values released after the close yesterday came in at $110.15, up 62 cents from Tuesday and up from $108.31 the previous week. Weekly average weights for Iowa/Minnesota for the week ending August 6th came in at 260.8 pounds, down from 260.9 pounds the previous week and down from 266.8 pounds last year. The estimated hog slaughter came in at 408,000 head yesterday. This brings the total for the week so far to 1.211 million head, up from 1.153 million head last week at this time but down from 1.213 million head a year ago.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
