Pullback in hog prices brings a much needed correction to the market and should bolster wholesale pork demand going into spring.
The drop in lean hog futures this week was swift as market participants reacted to a deterioration in pork product prices and the resulting negative impact this had on packer margins. On Friday the April Lean Hog futures contract settled at $68.15/cwt, down 12% compared to where it was at the start of the year. The pork cutout in late January was quoted as high as $83/cwt (Jan 23), 2% higher than the previous year despite a net increase in pork supplies. On Friday the cut- out was quoted at $77.34/cwt.