CME: Bearish Undertones for Pork Supplies

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Latest Pig Industry News

Monday, August 24, 2009

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CME: Bearish Undertones for Pork Supplies

US - USDA issued two supply related reports (Cattle on Feed and Cold Storage) on Friday afternoon and both held some surprises that may affect livestock futures, write Len Steiner and Steve Meyer.

Below is a brief recap of the cold storage numbers, including details:

The cold storage numbers held some bearish undertones, especially with regard to pork supplies. USDA reported that total pork in cold storage as of 31 July was 547.3 million pounds, 8.3 per cent larger than a year ago and 24.8 per cent higher than the five year average.

Supplies of ham in cold storage continued to rise at a fast pace, although they remain below year ago levels thanks to some significant revisions to year ago numbers. Total ham stocks at the end of July were 137.8 million pounds, 5 per cent less than last year but a whopping 23.6 per cent higher than the five year average. Ham prices normally help carry hog carcass values in Q4 but with such an increase in ham stocks, demand in Q4 could be softer than usual and negatively impact overall pork values.

Beef stocks were reported to be 448.2 million pounds, 4 per cent higher than a year ago and 2.3 per cent higher than the five year average. Broiler supplies remain below year ago levels but they are also showing some upward movement. Total whole broiler and broiler meat stocks at the end of July were 677.7 million pounds, 8.3 per cent lower than a year ago and 5.5 per cent lower than the five year average. Combined beef, pork, broiler and turkey stocks were reported to be 2.313 billion pounds, 0.8 per cent higher than a year ago and 7.9 per cent higher than the five year average.