Hogs were higher to start the morning, but quiet back and forth trading through the day led to liquidation ahead of the close. June finished just above unchanged and other hog contracts closed the day mixed. The hog index gained $1.07 to $73.01 and is projected $1.13 higher for Thursday.
The pork cutout was $2.50 higher in the morning pork report and up $2.18 higher in the afternoon at $87.26. Wednesday’s strength came from higher loin and ham prices, while the belly value was down for the day. However, the belly value is still up for the week and $29 over the low scored in late April. Monthly belly stocks have been record low since November, and the last Cold Storage report showed end of month March stocks were down 68% from a year ago. The seasonal outlook is more supportive from here forward, which could take easily take price back to the old highs at $160-180.
Despite mixed trade through Wednesday, the market is still within shooting distance of contract highs. We are neutral on rallies and favor 4th quarter sales.
