Hog markets recharged

Cash market fueled hog futures rally; cash receipts from hog sales set record last week

The hog market turned a strong corner this week as lifted prices brought new life to the market complex.  The seasonal drop in weekly hog slaughter numbers along with a noticeable decline in slaughter weights stirred solid cash hog prices.  At the close of the market day on Friday, cash hogs delivered to the eastern and western Corn Belt advanced $10 in one week at $72.89/cwt. and $74.77/cwt., respectively.

Thursday’s national negotiated hog price equaled 99.6% of the cutout value.  The western Corn Belt negotiated price was 102% of the cutout value, noted Ron Plain and Scott Brown, University of Missouri ag economists.

Wholesale pork cutout values climbed all week and finished at $73.86/cwt on Friday.  Loins also ascended higher to $91.65/cwt, up $6.42 for the week.  On the other hand hams and bellies closed lower on Friday at $55.32/cwt. and $66.49/cwt., respectively.

Impressive performance in the cash hog market fueled a rally in Lean Hog Futures on Thursday morning.  Nevertheless, the selling of summer contracts at midsession pressured prices lower for the remaining of the week.   Front-month May Lean Hog Futures closed 95 cents lower at $76.00 whereas June Lean Hog Futures settled at $81.25, down 17.5 cents from the previous day.

Noteworthy, cash receipts from hog sales by U.S. farms was record $26.4 billion in 2014, reported Plain and Brown.  Iowa, Minnesota, North Carolina, Illinois, Indiana, Missouri, Nebraska and Oklahoma all reached a billion dollars in cash receipts.

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