US weekly pork cutout values are currently trading over $100 US/cwt and have been for the past 2 weeks, a feat not achieved in recent history for this time of year as illustrated in the 20 year cutout graph dating back to 2005. Of course, cutout has traded above $100 US however it has not happened in the early weeks of November signalling a major shift in current pork demand.
Considering the USD Index trading above 105 the strength in cutout is that much more impressive as pork around the globe remains high valued when converted to other international currencies.
Two of the main drivers behind the aggressive move in cutout have been counter-seasonal strength in bellies and ribs which traditinoally trend lower into the cooler months of the year however given mild temperatures and a “late” fall continue to see strong domestic demand.
Cash hog prices continue to be a reflection of strong meat prices moving to above $90 US per cwt matching the price of market hogs from the week of August 9th this year. With no major changes expected in pig supply, cash hog prices are expected to continue steady heading into the holiday weeks of late Novemebr when prices traditionally bottom for the year.
