While pork values continue to push higher, the market psychology is still slightly bearish as traders have been looking for a peak in pork product markets for over a week. Speculative selling emerged to drive the market sharply lower yesterday. Pork cutout values, released after the close yesterday, came in at $101.29, up 48 cents from Friday and up from $94.33 the previous week. This is the highest pork value since August 26th of last year. In addition, the discount of futures to the cash market may also come into play or might at least limit the downside of the market. The CME Lean Hog Index as of June 21st came in at 101.42, up 92 from the previous session and up from 94.21 the week before. The 5-year average basis for August hogs is to show a slight premium at this time of the year so the stiff discount might help support. July and August hogs closed sharply lower on the session yesterday and both experienced out-side trading days. August closed at the lowest level since May 30th as stops were activated under the June 13th lows. Ideas that supply is on the rise after recent tightness plus talk that higher grain values could boost near-term marketings helped to pressure. Traders are a bit concerned over the potential stress on hogs if temperatures push much higher in the western Corn Belt. The estimated hog slaughter came in at 384,000 head yesterday. This was down from 391,000 last week and down from 388,000 a year ago as this time.
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