Forward hog contract prices took a big jump Monday.
Tyler Fulton with Hams Marketing Services attributes the jump to the most recent Hogs and Pigs Report, which showed a significant drop in projected market hog supplies over the course of the next six months and beyond.
He commented on another factor.
"That coincided with a change in hog futures limits. They expanded those limits to pretty much the largest that we've ever seen before, or at least in my memory, and consequently we saw the biggest move in hog futures and therefore forward prices that we've ever seen. It was a pretty remarkable day and it reflects the fact that hog supplies are going to be down roughly six per cent according to the USDA from year ago levels, which is very significant."
Fulton also touched on U.S. cash prices.
"We typically see more influence from seasonality on the day to day cash prices that producers that haven't got a committed contract have. They've been lagging what we've seen on contracted hogs or on hogs that are referencing the pork carcass cutout, the value of the pork that the packers sell. The reality is the report out last week will likely help raise up those cash prices as well."Click here to see more...