October hogs closed sharply higher on the session Friday finding support from higher cattle trade and strength in other commodity markets. While the monthly pork export data for June was down from May, traders see July and August exports to China as a reason to suspect higher monthly exports ahead. The recent selloff was widely thought to be caused by negative outside market influences as well as ideas of a normal seasonal increase in production into the fall. However, many traders continue to see evidence that China and South Korea are going to be much more aggressive importers of pork. South Korea has already removed import tariffs for pork through the end of September. Pork sales to South Korea in June were up 20% from last year and 1st half imports were 122,880 tonnes, up 145% from last year. China/Hong Kong pork imports in June from the US ranked 3rd and were up 81% from last year. If pork exports stay at strong levels going into the fall, this could reduce the per capita supply in the US and provide some offset to the normal seasonal increase in supply. While October hogs are trading at 89.47, the CME 2-day Lean Hog index is at 107.84. August hogs expired Friday and traded to a new contract high and a new all-time high for the nearby futures at 107.45. The CME Lean Hog Index as of August 10th came in at 107.84, up 20 cents from the previous session and up from 105.46 the week before. The estimated hog slaughter came in at 390,000 head Friday and 24,000 head for Saturday. This brought the total for last week to 2.034 million head, up from 1.953 million head the previous week but down from 2.050 million head a year ago. Pork cutout values released after the close Friday came in at $109.85, up 42 cents from Thursday and up from $108.87 the previous week.
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