February lean hogs traded lower today after briefly being positive early in the morning, the contract settled at 88.80, lower by $1.275. After yesterday’s cold storage report I thought there would have been more support in the market than what was shown, but with more volume traded today than yesterday, the market looks poised to trade lower on Monday (Friday is a half day and expected little volume).
The CME lean hog index is down another 43 cents to $86.54 (as of Nov. 21), the lowest level since Feb. 4 but still $13.39 (18.3%) above year-ago. Last year, the cash index bottomed on Nov. 29 and then started a strong price recovery that lasted into August.
The USDA pork cut-out came in at 89.96, down 72 cents from Monday and down from $95.09 last week. This was the lowest it’s been since January 20th. The estimated hog slaughter came in at 492,000 head yesterday. This brings the total fort the week so far up to 980,000, unchanged from last week but up from 961,000 one year ago.
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Peter McGinn
Account Executive
Walsh Trading, Inc.
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