February hogs closed sharply lower on the session yesterday and posted new lows late in the day. Continued weakness in the cash market and hefty near-term pork production were thought to have pressured the market to the lowest price levels since September 7th. Strength in cattle, a weaker US dollar and a recovery in grain markets helped to provide support early in the session. Pork values are still higher for the week but cash hogs in Iowa continue to decline, and this has some traders nervous over packer demand and the possibility of a continued slide in cash. Iowa/Minnesota direct trade yesterday came in at an average price of 80.27, $1.18 lower on the day. Pork cutout values released after the close yesterday came in at $90.74, down 10 cents from Wednesday but up from $89.92 the previous week. The CME Lean Hog Index as of December 13th came in at 85.66, down 24 cents from the previous session and down from 86.34 the week before. The estimated hog slaughter came in at 430,000 head yesterday. This brings the total for the week so far to 1.711 million head, down from 1.721 million head last week at this time but up from 1.690 million head a year ago.
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