LEAN HOGS
Cash hog prices were steady yesterday on moderate to active hog receipts. This is a short kill week. Pork packers are profitable, however, which will encourage active slaughter on Saturday and prevent any sort of backlog of hogs. With margins profitable there is strong incentive to keep animals moving. This week’s kill is projected at 2.114 million hogs, down about 12% from last week but still up over 6% from the year ago holiday kill. The pork was down .84 yesterday with the cutout setting at $72.30. The monthly cold storage showed a hefty draw down in pork stocks during Oct. Total stocks are up 13% from last year. Hams, ribs and loin stocks are above year ago levels. Belly stocks, pork butts and trimmings all stand below last year. The drawdown of 50 million pounds in the face of record large production is one of the largest Oct drawdowns on record. Low prices cure low prices. Last week the hogs posted a bullish engulfing pattern on the weekly chart. We’re looking to buy the Feb on a further pullback this week.