LEAN HOGS on the CME closed down on Monday. The JUNE’11LH contract closed at $98.525/cwt; off $1.525/cwt and $2.750/cwt lower than a week ago. AUG’11LH futures closed at $99.475/cwt; down $0.775/cwt and $2.075/cwt lower than last report. Differing from cattle, short-term market-ready hog supplies are still tight. However, pressure on fresh pork sales is expected to slow at meat counters because retailers are seen as generally having what they need for the grilling season. Supporting features in the livestock pits in Chicago include traders seasonally buying June hogs and selling June cattle. That appeared to be the play on Monday as losses in hogs trailed fat cattle. This is the third consecutive decline in futures and may be a technical sign that prices will trend lower. Cash hogs traded flat to $1 higher with top hogs going from $64-$64.50/cwt; live basis. Buying will most likely back off quickly as processors have most of the hogs they need for the short week. USDA put the pork cutout at $94.98/cwt; up $0.27/cwt but $1.30/cwt lower than last report. According to HedgersEdge.com, the average packer margin was lowered $5.20/head to a negative $2.70/head based on the average buy of $69.53/cwt vs. the average breakeven of $68.53/cwt. The latest CME lean hog index was placed at $94.98; up $0.27 and $1.17 over last report.
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