Weakness in the cash market, continued demand struggles on the East coast and ample short-term supply are all seen as bearish short-term forces. The lack of extreme heat for the Midwest this week suggests an increased flow of hogs to the market as producers who held back on marketings last week move hogs to the market this week. Cash markets were down sharply on Friday and look down again today. August hogs closed slightly higher on Friday with an inside trading session but the close near the lows did not seem to inspire technical traders to get involved on the long side. A sharp drop in live hog weights may have strengthened the market on ideas that the extreme heat in the Midwest will lower pork production. However, weaker cash live hogs trade in Iowa and southern Minnesota pulled some support out of the market. Outside market forces were weak as well, with renewed anxiety over European debt, a stronger US dollar and disappointing US jobs data. The CME Lean Hog Index as of July 3rd came in at 100.90, down 47 cents from the previous session and down from 103.08 the week before. The estimated hog slaughter came in at 411,000 head Friday and 82,000 head for Saturday. This brought the total for last week to 1.760 million head, down from 1.999 million the previous week but up from 1.731 million a year ago. Pork cutout values, released after the close Friday, came in at $90.13, down 51 cents from Thursday and down from $96.15 the previous week. This is the lowest pork trade since June 13th.
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