Hog Futures Find Support and Gain at Midweek: CME hog futures found support and marked solid daily gains. October and December hogs both closed above their respective 100-day moving averages, while June hogs traded at the highest price in 3 months. The CME cash hog index was down $.18 at $85.56 on Wednesday, and AgResource estimates a $.09 decline for Thursday.
Hog slaughter at midweek totaled 1.453 Mil head, up 482,000 from last week’s holiday-shortened kill and 29,000 head larger than a year ago. The increased supply has weighed on wholesale pork prices this week. The pork cutout value was down $1.89 on Wednesday at $92.91, led by a $6 break in the loin primal.
The monthly Consumer Prices report showed that the average retail pork price in August was down 0.5% from July at $4.90/Lb. However, this was 1% higher than a year ago to mark the 6th consecutive month of year-over-year gains. This compares to the cutout value that was down 7% in August and the average lean cash hog price that was 8% lower.
The cash hog index continues to work lower, while wide nearby CME discounts continue to offer support. But with 4th quarter production increasing 4% over a year ago, the price risks are to the downside. AgResource holds a bearish market outlook as the market forges a secondary top in the coming days.
