The hog market is showing signs of strength and looks to continue higher as we are now moving into February. Cash hogs are expected to move higher due to the packer interest in keeping the processing speeds going at an accelerated rate. The 1/26 CME Lean Hog Index was up another $.72 to $66.95. The National Pork Carcass Cutout value was up $2.38 to $83.49 on average movement of 338 loads. Estimated packer margins were $45.75/head for non-integrators and $41.81/head for integrators vs. $42.18 and $37.02 the previous day. The weekly Export Sales data showed 52,855mt of pork booked on the week ending 1/21. That was the largest since October and was just the 6th weekly sale above 50,000mt since 2020 began. Weekly kill is down 2.83% vs. last year. USDA’s National Average Base Hog price was quoted at $57.01, up by $.26. Pork cutout futures closed with gains of $.20-$.40, save for a $0.97 drop in Feb.
The futures are rolling over and we are starting to see weights decrease steadily from the beginning of the year. Demand is very strong right now with the December cold storage report showing belly stocks well below last year’s number. Analysts think the April futures are in overbought territory with such a high premium to the cash market. The large supply of pork is being met with soaring demand and is helping to support the market, continued talk of African Swine Fever in China is one of the major reasons we are seeing these strong export numbers. April futures finished at $76.37 yesterday, I would be looking to stay long unless we see a close under $74.50.