February hogs traded found early support from outside market forces but commodity market weakness along with news of a sharp drop in ham prices this week helped to pressure the market later in Thursday's session and drive the market down to close 130 lower for the day. Many traders believed that the break in ham prices was a sign that holiday orders may be nearly completed. However, ham prices jumped $4.58 late Thursday to trade $79.58 as compared with $79.75 last week at this time. The sharp drop in cut-out values late Wednesday left some traders less confident for the potential of higher cash market prices over the near-term. Weak economic news from China was widely thought to have added to the negative tone. While cash markets are higher this week, packer margins have been pinched and weaker pork trading along with lower corn prices have many traders nervous that producers will add tonnage to the near-term slaughter by feeding hogs to a higher weight. The CME Lean Hog Index as of November 29th came in at 84.97, up 87 cents from the previous session and up from 83.29 the week before. The estimated hog slaughter came in at 430,000 head yesterday. This brings the total for the week so far to 1.720 million head, up from 1.292 million head last week at this time and up from 1.703 million head a year ago. Pork cutout values released after the close yesterday came in at $89.30, up $1.09 from Wednesday but down from $89.39 the previous week.
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