June 22, 2009

US hogs fell on Thursday (June 18) amid an unexpected drop in pork values a day earlier to their lowest level in 1-1/2 months, but futures were able to cut losses by the session's end.

US Department of Agriculture (USDA) data on Wednesday (June 17) afternoon showed the pork cutout value, a compilation of various pork cuts, fell US$2.77 to US$54.87 per cwt, its lowest since May 4.

But several traders disputed the data, saying that cutout values could not have dropped that much at a time when meat packers were willing to pay up for cash hogs.

Other traders agreed that the price break was unexpected and it was not consistent with a firming tone to pork prices and packers paying up for cash hogs this week.

Further weakness in some pork products early on Thursday (June 18) again weighed on futures late in the session.

Cash hams and pork bellies were both quoted lower in the morning USDA National carlot pork report.

July lean hogs closed off 0.025 at 59.925 cents per pound and August was off 0.400 at 59.150.