Pigs bring out the Chicago bulls

By Joanna Levin

PIGS extended their gains this week, with the Chicago June lean hogs contract rallying to 62.95¢/lb on 8 June, up from 61.8¢/lb on the week. The market has turned bullish, partly on expectations that wholesale pork prices will rise because of a slowdown in the slaughter rate.

The slower slaughter rate – due to warmer weather – has cheered the market. The weekly kill is only 3% above last years level at 1.683 million head and the Saturday kill was only 27,000 pigs. The retail margin for pork has averaged 3.19% year-to-date, compared with 2.46% last year. However, there are some warning signs out there. Some market analysts argue that pork production is still running at 10.3% above last year, while growth in demand is several percentage points lower.

Cash pig prices have inched higher, with packers paying 42.50-43.50¢/lb at the terminals on Monday, compared with 42.50¢/lb a week ago. The Iowa market for live pigs is unchanged from a week earlier at 40.00-41.50¢/lb.