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Lean Hogs Lower on Swollen US Inventory

June 28, 2016 at 15:50 by Brent Lantzy

The highest volume August lean hog contract on the Chicago Mercantile Exchange (CME) was down 0.125 cents to 83.375 cents per pound as of 15:28 GMT, while the July contract stood down 0.150 cents to 83.000 cents per pound.

The most recent CME lean hog index for the 2 business days ending June 24 stands at 84.61 cents per pound.

The USDA’s quarterly Hogs and Pigs report released on Friday indicated high levels of production so far this year. Swollen US hog inventory at 62.4 million head (up 2% from last year) represents the highest June 1 market hog inventory since estimates began in 1964.

Following the success of the British campaign to leave the EU, industry analysts are trying to get a handle on how this will affect pork exports. Though the largest US export partners for pork are Japan, Mexico, China, Canada, and South Korea, a steadily rising US dollar could dampen demand throughout the world as currency traders seek the security of the greenback amidst the Brexit turmoil.

From late-May through to late-June, August lean hogs shot from around 78 cents to near 90 cents per pound, though about half of these gains were lost prior to the release of the USDA’s report on Friday.

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