EARLY HOG COMMENTS
FUTURES OPENING CALLED: STEADY EASIER – CASH REPORTING SOFTNESS ON LIGHT TRADE ON
WEDNESDAY THOUGH SOME UNDERLYING THING STILL HOLDING TOGETHER BUT STILL SEE
VALUES VULNERABLE NEXT WEEK AND BEYOND – WOULD NEED SOME GOOD NEAR TERM
BLOOM FROM EXPORTS TO KEEP FROM PULLING BACK – ON THE NEAR TERM STILL MORE
NEAR TERM CHOPPY TRADE –MONTHLY SUPPLY/DEMAND NUMBERS OUT IN A FEW MINUTES
Quarterly
PREVIOUS DAYS CASH: .91 LOWER BASE WEST BELT: 69.00-81.50 YEAR AGO CME INDEX: 93.74
NATIONAL LEAN NET PRICE 79.05 OCT 10 NET PRICE 79.94 LATEST CME 2 DAY: 81.78 OCT 9
LATEST CME 1 DAY: 82.10 OCT 9
SLAUGHTER YESTERDAY: 434,000 PORK CUTOUT 86.65 ESTIMATED 1-DAY: 82.17 OCT 10
TODAY’S ESTIMATE: 435,000 CHANGE +.96 PACKER MARGINS: +4.71 WEST
Cash hogs are looking near steady today. Cash soon to be losing some support as some domestic
demand things run their course expect cash to be pulling back off from this week and over the weeks
ahead and through much of November – don’t think a possible modest near term spurt in exports that
some have been talking about here recently will keep values from softening over the next several weeks.
Talk now for this week’s Saturday kill being up near 230,000 head and at that near 35,000 head more than
a week ago so now mostly those couple additional plants I had noted since back last week coming back
after being off last week, they typically kill more Saturdays than not during the fall. The cash markets
hold well through this week all fits well for those that have a vested interest in the Oct and also have
some influence on the cash market. A little later (winter/spring) expect additional Chinese interest to be
more substantial and supportive to values. Updated weekly numbers on imports from Canadian – feeder
pigs 98,956 head one of the largest this year supporting year to date 101.5% of last year – barrows and
gilts 8840 head well in line with the past several months and brings the year to date total to 77.3% of a
year ago sows and boars 10193 head with year to date 101.4% then with the total of all 99.2% year to date.
As I have consistently noted in the past getting back to the relative seasonal supply/price value level of
back in August by the time Oct expires would support the index value back up into the low $80’s and as
we have come out of the price hold that has now fully developed – be this way in the early December
time slot, with other factors also considered, then the index would be valued in the $77.00 – $79.00 range
in that time slot. The latest one-day cash index value 82.10, national base cash market now supports an
index value near 82.30, while Oct, which expires tomorrow, closed at 82.57 though weaker overnight.
Seasonally Dec futures tend to trend lower from near early October into the later part of October and that
trend is largely influenced with the typical weaker tone in cash from after early October on into near
mid-November. In Dec last weeks a reversal day has kept price action in check up until yesterday when
it not only posted its first close for the move above 77.00 it settle above 78.00 at 78.10 that now will help
encourage some additional near term buying but yesterday’s lower quoted cash of has stimulated some
selling – for now this all contributes to choppy near term trade in just a little different range, close
Wednesday 78.10. Electronic trade – as of near 6:45 CDT – Oct .35 lower – Dec .35 lower. MAST Group LLC
