It was a mostly lower day of trade in the hog market on selling ahead of the June inventory report. July was the exception and found support from continuing strength in the cash market, where the hog index was up $1.27 at $89.30 and projected another $.87 higher for Monday.
The Commitment of Traders report showed that through Tuesday, funds were buyers of 1,832 contracts, increasing their long hog position to 66,435 or the largest since last July. Hedgers used the last week’s late break to cover a small portion of sales, buying back 2,528 contracts for a net short position of 123,383 contracts. Heading into the June inventory report on Thursday, producers have slightly less hogs hedged than they did at the same time last year, despite an outlook for much larger inventory numbers.
A quieter week of trade is expected ahead of the inventory data. July hogs are now $4 under the cash market, which should underpin the market on any sharp corrections.