By Joanna Levin
STATESIDE hog futures finally managed to turn around after a precipitous decline which has dragged prices down by 20% during the past six weeks.
The Chicago August lean hogs contract closed yesterday (Tuesday) at 50.4¢/lb, a 0.75¢ climb since Monday and up from 49.25¢/lb a week ago.
Cash prices for slaughter hogs last week were approximately 3¢/lb higher than the August futures contract after adjusting for the differences in the contract terms and delivery. As the August contract approaches expiration, this pricing anomaly has resulted in a rise in August futures and a drop in the cash market to restore the balance.
The cash hog market at the terminals closed on Tuesday, 4 August at 35.-35.75¢/lb, down from 37-39¢/lb a week earlier.
Pork belly futures also rallied early this week, with the Chicago August contract settling yesterday at 59.6¢/lb, up 2.7¢ from Monday but unchanged from a week ago.
Overall, most analysts remain bearish on the US pig industry because of severe overproduction which will depress packer prices towards the end of the year.