LEAN HOGS on the CME finished up on Monday with the exception of the August 2011 contract. The APR’11LH contract closed at $93.250/cwt; up $0.100/cwt but $0.95/cwt lower than a week ago. AUG’11LH futures closed at $100.85/cwt; down $0.025/cwt and $3.25/cwt off from last report. Higher pork prices on faltering beef and talk of higher cash trade this week were supportive. Seasonal trend-strength in hog prices ahead of Memorial Day was seen as positive in the pits. Export markets were very supportive as Japan increased imports due to the disaster there and South Korea buys more amid herd reductions on reports of foot-and-mouth disease there limiting internal supply. Higher corn prices kept the lid on however hog prices. Cash processor demand was flat on Monday while they take a “wait-and-see” attitude toward price movement. These same processors may have to bid up prices later in the week to fill processing lines. USDA put the pork cutout at $94.28/cwt; up $0.32/cwt and $0.16/cwt higher than last week at this time. According to HedgersEdge.com, the average packer margin was at a positive $0.85/head based on the average buy of $67.82/cwt vs. the average breakeven of $68.13/cwt. The latest CME lean hog index was placed at $91.23; up $0.20 and $2.62 over last report.
Roberts Commodity Report © Copyright 2011. Michael T. Roberts