The cash market has been trending lower since hitting a peak on March 8. Following the nearly three-week slide, which saw the quotes drop in 13 of the last 15 days, producers may be even more reluctant to sell at current prices. The market, based on the USDA's national weighed average price, has fallen US$6.87 per hundredweight, or 9.4%, since March 8. In the latest week, cash prices fell US$2.21, or 3.2%.

 

The USDA's quarterly hog and pig report, released Friday (March 26), however, showed smaller-than-expected figures for most of the categories, and the majority of the numbers came in below the low end of the range of analysts' estimates.

 

Since the government's figures came so much under the pre-report estimates, CME lean hog futures prices soared, and most of the contracts gained the daily limit of 3.0 cents a pound.

 

The surge in futures prices caused hog producers to hold off selling or even offering hogs for sale on a negotiated basis, according to livestock dealers and market managers. Some are willing to wait few more days if necessary to see if cash prices may turn firmer later in the week.

 

Rich Nelson, director of research at Allendale Inc. in McHenry, Ill., said some producers may not be willing to do any pricing of animals to begin the week. He expects little interest in selling.

 

A veteran livestock buyer in the eastern Corn Belt said pork packers may have enough hogs already purchased or booked for this week to avoid having to pay any more for hogs. He said the market may be stuck in a flat to weaker trend throughout this week and possibly next week as well.

 

Wholesale pork prices may hold the key for where the cash hog markets could be headed. Buying interest from grocers for fresh pork ahead of the Easter holiday could be limited. The pork carcass composite value during the latest three weeks fell US$4.95, or 6.5%. Last week, pork prices declined US$3.06, which was 4.1%.

 

Some analysts and brokers said another day or two may be needed to determine which of the groups wins the tug-of-war match. USDA data show that pork packers had about 22,000 more hogs booked in advance for delivery this week compared with the average of the past three weeks. These additional hogs in a holiday-shortened work week may be enough to keep the plants from being forced to pay more money for additional animals.

 

The wholesale pork market would have to jump as well for hog prices to move appreciably higher, and buying interest ahead of the Easter holiday so far appears to be light, a broker said. So, the market may be pulled from both directions throughout the week.