Hogs were weaker at the open and broke to new weekly lows early Thursday morning, but the early break found good demand that carried hog futures higher into late in the day. June and August each marked new contract highs, while all summer contracts finished above $80 at the close. The hog index was 13 cents at $76.07, and projected 19 cents higher for Friday.
The latest estimates for hog producer returns, as calculated by IA State University and updated last week, showed a downturn during the month of April. Per head farrow to wean profits were down $7.51/head from March, but still positive at $2.74/head. Estimated returns for wean to finish operations turned negative and were down $16/head from March at -$6.48/head. Feed cost estimates in both operations were down slightly for the month, and lower returns were driven by lower hog prices. Margins improved through May and the CME is offering profitable prices through the end of the summer, while red ink is expected to return late in the 3rd quarter. We continue to favor late year sales on rallies.
