KANSAS CITY (Dow Jones)--U.S. Cash hog prices have been generally flat the
past two weeks and are expected to remain that way most of this week despite
recent sharp gains in wholesale ham prices and the pork carcass composite
value.

  Larger-than-expected supplies of slaughter-ready hogs have provided pork
packers with sufficient numbers of animals to fill their processing schedules.
In addition, frozen pork stocks at the end of May, June and July were record
large for those dates, according to the U.S. Department of Agriculture's
monthly cold storage reports.

  The big supplies along with heavy hog weights for this time of the year have
provided enough pork to the domestic and international markets to hold down
wholesale prices of most cuts.

  Hams have been the exception, and that cut has had a dramatic rally in prices
the past two weeks. On Aug. 14, the U.S. Department of Agriculture quoted its
ham primal cutout value at $39.28 per hundredweight. One week later, on Aug.
21, the ham value had climbed to $49.07, and by the end of last week the USDA's
ham primal quote was up to $62.65. That price represented a gain of $23.37, or
59%, in just the last two weeks.

  Hams make up about 25% of the pork carcass by weight, and the sharp gain in
ham prices during the latest two weeks was primarily responsible for a
corresponding rise of $5.38 in the pork cutout value.

  A question raised by some hog producers is since pork prices have climbed so
dramatically, why hasn't it translated to higher hog prices as well? Market
analysts and livestock buyers said pork packers have not needed to raise prices
for hogs yet because supplies are sufficient for the current slaughter
schedules.

  Some packers may also be wary of the ham market since it has rallied so
sharply in such a short period and are concerned that prices may not hold at
the higher level. Analysts and meat brokers said the buying interest for hams
that pushed prices up so dramatically in the latest two weeks was primarily
from the international markets. The orders can turn on or off in short notice
and can be price sensitive, so there's no guarantee that more business will be
done on hams now that prices are up so much from where they were just two weeks
ago.

  A Midwest-based broker said larger projections for this week's slaughter,
with some of the early estimates up to 2.250 million head, could weigh on
wholesale pork prices.

  Other brokers and analysts said that since the meat orders for the Labor Day
holiday have been filled or will soon be completed, grocers may hold off buying
additional product for delivery after the holiday, which could put pressure on
pork prices.

  The cautious outlook for pork sales and prices immediately following the
holiday is expected to result in mostly flat cash hog prices early this week
and may lead to some weaker hog bids by midweek, analysts and livestock dealers
said.