CME: Summer Hog Futures Bolstered in Recent Days

US - Hog slaughter for the week was 2.249 million head, 6.3 per cent higher than the previous year, reports Steiner Consulting Group, DLR Division, Inc.
calendar icon 24 May 2017
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Since the first week of March weekly hog slaughter has averaged 5 per cent above year ago levels, in line with the levels implied by the March Hogs and Pigs Report.

Summer hog futures have been bolstered in recent days by robust demand for a number of key summer items.

The pork belly primal closed on Friday at $137.6/cwt, 33 per cent higher than a year ago.

Belly prices normally hold firm through June and the recent gains coupled with tight inventories have contributed significantly to the overall pork cutout.

Pork trim prices also have been performing better and are expected to appreciate further given the very large spread between beef and pork trimmings.

With 50CL beef trading at $200/cwt, pork 72CL trim at $83 is a definite bargain. Hams and picnics have benefited from the seasonal increase in the value of pork trim.

Other pork items, be this ribs or butts or loins all have benefited from the seasonal demand improvement.

For now futures market participants are focusing on all the good news and some producers likely will take advantage of the rally to hedge their Q4 supplies.

The release of the June Hogs and Pigs survey data and the pace of exports will likely start focus the mind on what is expected to be record pork supplies this fall and the price levels required to push all this pork through domestic and export channels.

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