CME: Hogs and Pigs Report - A Preview

by 5m Editor
26 June 2008, at 8:59am

US - CME's Daily Livestock Report for 25th June, 2008.

USDA will release a number of critical reports on livestock and grain supplies in the next few days and the market is expected to pay even closer attention than usual. On Friday, USDA will release the results of its quarterly survey of US hog operations, estimating the total supply of hogs and pigs as of June 1 as well as the size of the US breeding herd and producer plans regarding future expansion or contraction. Then on Monday, USDA will unveil the results of its survey of grain producers indicating the number of acres planted with corn, soybeans and other crops. Because of extensive flooding and crop damage in key producing areas, USDA has indicated that it will re-survey producers in IA, IL and four other surrounding states and it is our understanding that the results of this effort will be reflected in the Acreage report to be published on Monday. A more complete survey will be conducted in July. Also on Monday, USDA will publish its quarterly report on grain stocks as well as the results of its weekly survey of crop progress. We will cover some of the estimates of the grain reports tomorrow.

E-Livestock Volume 25-Jun 24-Jun 18-Jun
LE (E-Live Cattle): 6,824 7,757 8,431
GF (E-Feeder Cattle): 385 487 237
HE (E-Lean Hogs): 18,590 14,373 9,720

As the table to the right shows, the general expectation is that the upcoming hogs and pigs report will note that hog supplies remain notably higher than a year ago. These estimates were reported by Dow Jones on Wednesday afternoon following its survey of nine market analysts. Based on the average of their estimates, the total inventory of hogs and pigs in the US as of June 1 is currently estimated at 65.636 million head, 4.6% or 2.887 million head larger than a year ago. If correct, this would be the largest June 1 hog inventory since 1971. There is also broad expectation that the size of the US hog breeding herd continues to shrink and the average of pre-report estimates pegged it to be 1.4% lower than a year ago. While hog producers have been liquidation sows, the pace of liquidation has not been as swift as some expected in light of record corn prices (see DLR on June 23). Inventories of market hogs are expected to be 5.1% higher than a year ago. Hog supplies in the short term are expected to remain quite large as indicated by the inventory of hogs weighing 120 pounds or heavier. Inventories of feeder pigs, hogs weighing 60 pounds or less, were estimated to be 2.9% higher than a year ago. Based on the average of analysts’ pre-report estimates, pork supplies in Q4 are currently expected to be more than 2% higher than the all time records established last year. Let’s all hope that the export engine keeps on humming along, or it will be another long winter for US hog producers.

June 1 Hog Inventory

Pre-Report Estimates of the USDA June 1 Hogs and Pigs Report
Average Range
All hogs and pigs on June 1 104.6 103.4 - 105.7
Kept for breeding 98.6 97.3 - 99.3
Kept for marketing 105.1 103.8 - 106.5
March-May pig crop 102 101.0 - 103.6
March-May pigs per litter 100.8 100.5 - 101.1
March-May farrowings 101.3 100.5 - 102.8
June-Aug farrowing intentions 97.9 97.1 - 99.0
Sep-Nov farrowing intentions 96.7 95.0 - 97.5
Hogs weighing under 60 lbs 102.9 101.7 - 105.0
Hogs weighing 60 to 119 lbs 104.7 103.2 - 107.0
Hogs weighing 120-179 lbs 106.8 105.6 - 108.0
Hogs weighing 180 and over 107.7 106.2 - 109.0

5m Editor