Trade Expectations Foresee Continued Slow Growth

US Weekly Hog Outlook, 30th June 2006 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 1 July 2006
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Ron Plain
Ron Plain

The trade expectation for the June 1 Hogs and Pigs report is continued slow growth. The average trade estimate is for all hogs and pigs at 100.9 percent of a year earlier, breeding herd 101.3 percent and market herd at 100.9 percent of June 1, 2005. The report will be released at 2:00PM central daylight savings time this afternoon.

The average live weight of barrows and gilts increased by 0.4 pounds from last week but was still 1.5 pounds below a year earlier. Last year, weights for the week compared to the week ending June 24. This year, weights declined 2.4 pounds from a week earlier. This suggests temperatures were probably quite hot for that week in 2005. Weather conditions for the last several days have been conducive to good rates of gain. Even so, the probabilities are high that hog marketings are quite current.

Cash hog prices were pushed sharply lower this week as packers attempted to improve margins.

Top live hog prices this Friday morning were $6 to $7 per cwt lower than a week earlier. The top live prices this Friday morning for select markets were: Peoria $48 per cwt, St. Paul $51 per cwt and there was no reported price for Sioux Falls and interior Missouri.

Weighted average carcass prices this Friday morning were $6.03 to $8.13 per cwt lower than 7 days earlier. These carcass prices by area for this Friday morning were: western Cornbelt $70.94 per cwt, eastern Cornbelt $71.69 per cwt, Iowa-Minnesota $71.04 per cwt and nation $70.08 per cwt.

Pork product prices this Thursday afternoon were $8.77 per cwt lower to $4.90 per cwt higher from a week earlier. Loin prices at $94.95 per cwt were down $3.78 per cwt from last week. Boston butts were down $4.52 per cwt at $81.49 per cwt. Hams at $63.09 per cwt were down $8.77 per cwt, and bellies were up $4.90 per cwt at $105.01 per cwt.

Pork product cutout for Thursday afternoon at $77.72 per cwt was down $3.40 per cwt from a week earlier.

Slaughter this week under Federal Inspection was estimated at 1,844 thousand head, down 1.9 percent from 12 months earlier.

Commercial red meat production in May set a new record - up 9 percent from May 2005. Beef production was 11 percent above last year. Pork production was up 7 percent from 12 months earlier. Veal production was 1 percent below 2005, but lamb and mutton production was 10 percent above 2005.

The June Hogs and Pigs report came in a little more positive than the trade estimates. The total number on farms June 1 was 100.3 percent of a year earlier, the market herd was 100.2 percent of 2005, and the breeding herd was 101.4 percent of 12 months earlier.

Our estimate for the third quarter price is $43-$46 per cwt for 51-52 percent lean. This compares with $50-$51 in 2005. For the fourth quarter, our estimate is $38-$41 per cwt for 51-52 percent lean hogs. In 2005, the fourth quarter price was $45.54.

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