Lean hog futures were stronger on Wednesday as market participants were optimistic about reports of improving cash pork prices and better packer demand for hogs in the coming days, according to the CME Daily Livestock Report. Wednesday’s strength continued into Thursday’s trade.
“Hog and pork prices declined in October as a result of seasonally higher slaughter numbers, heavy hog carcass weights and the desire of producers to get ahead of weight gains created a short term glut of product,” say Steve Meyer and Len Steiner, authors of the DLR. “Hog weights remain near all time record levels but they appear to have leveled off and they are actually down compared to late October.
Hog carcass weights for Tuesday Nov. 2 were 207.55 pounds (dressed weight average). “This is still about 3 pounds heavier than a year ago but lower than the 209 pound carcasses we saw toward the end of last week,” say Meyer and Steiner.
The authors also note that packer margins should be quite good and if hog supplies tighten in the coming weeks. It is likely this will support higher hog prices for December and January. A weaker U.S. currency is expected to support prices for grain exports and meat products.
Source: Daily Livestock Report