Hogs were higher at the open on Friday and marked higher closes for both the day and this week, with the strong gain noted in July which had the best weekly finish since early February. Technical demand in summer futures developed after the markets held key levels on Thursday, while cash prices continue to gain. The hog index was $1.48 higher on Friday at $69.12, or $6.88 higher for the week. The calculation for Monday shows another $1.52 higher and over $70 for the first time since late March. Negotiated prices continue to strengthen, but have slowed late week.
Placed against hog feeding margins at the CME have steadily improved over the last several weeks on better hog prices and weaker corn futures, which has supported weaned pig prices in the spot market. The USDA reported a weekly average weaned pig price this week of $31.08/head, up $.20 from last week, but still $5 under a year ago. Based on our view for the hog and grain markets, forward margins are likely to turn down in the upcoming weeks.
