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Short-Term News Positive For Hogs


 The market technical action improved with the rally yesterday and the market seems to have put in a “higher low” for April 6 as compared with March 4. This is a positive technical development. The market seems to be in position for further gains as packer demand is very strong, and supply is tightening into the second quarter as compared with the first quarter of the year. The USDA boxed beef cutout was up 75 cents at mid-session yesterday and closed $1.36 higher at $273.47. This was up from $271.53 the previous week and was the highest the cutout had been since February 14. June cattle closed sharply higher on the session yesterday and the buying pushed the market up to the highest level since April 1st.

Talk that the strong rally in beef prices over the past few weeks could be enough to support higher trade in the cash market in the weeks ahead has helped to support. The cash live cattle market is firmer this week. On Tuesday there were 21,904 head reported across the five regions with a weighted average price of 140.08. This was up from an average of 138.69 last week. Outside markets carry a bullish tilt with very strong gains in industrial and agricultural markets. The USDA estimated cattle slaughter came in at 125,000 head yesterday. This brings the total for the week so far to 249,000 head, up from 246,000 last week and 230,000 a year ago.


The market experienced an impressive technical bounce yesterday and a firm tone to pork cutout values helped to support. However, the premium of futures to the cash market plus the outlook for lower exports plus a higher than normal weights are factors which might boost short-term US pork availability.  China imported 594,000 tons of meat in March, down 42% from a year ago. Imports for the first three months of the year are down 37%. The USDA pork cutout, released after the close yesterday, came in at $105.33, up $1.60 from Monday and up from $102.16 the previous week. This was the highest the cutout had been since March 31. June hogs closed sharply higher on the session yesterday and the buying push the market up to the highest level since April 4. Strong gains in many agricultural markets plus a surge higher in crude oil and solid gains in the stock market were all seen as positive forces. With the oversold condition, it should not take much in the way of positive fundamental news to expect a recovery bounce.

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