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Weekly Review: Cereal Crop Estimates Good News

by 5m Editor
16 August 2008, at 4:57am

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Hog producers received good news this week with USDA's August estimates of the 2008 corn and soybean crops. The estimate of the 2008 corn crop is for a yield of 155 bushels per acre and a total production of 12.3 billion bushels. This year's crop is forecast to be up 17 percent from 2006 but down 7 percent from the 2007 record crop. The 155 bushels per acre, if it comes true, will be the second highest yield of record, second only to the 160 bushels per acre yield of 2004.

The August estimate of the soybean crop is for a total production of 2.97 billion bushels, up 15 percent from the 2007 crop but down 7 percent from the 2006 record high crop. The forecast yield for soybean is 40.5 bushels per acre, down 0.7 bushels per acre from 2007.

Ending corn stocks for the 2008-09 marketing year are estimated to be 1.133 billion bushels, down from 1.576 billion bushels expected for the 2007-08 marketing year. Corn prices per bushel are forecast at $4.90-5.90 for the 2008-09 marketing year, up from the $4.25 per bushel of the past year.

Soybean prices for the 2008-09 marketing year are forecast at $11.50-13.00 per bushel, up from $10.15 per bushel from the 2007-08 marketing year. Soybean meal prices for the 2008-09 marketing year are forecast at $330-390 per ton, which compares to the $335 per ton for the 2007-08 marketing year.

The July rainfall across much of the Cornbelt can be credited with the potential for the second largest corn crop and yield per acre of record.

Cash feeder pigs this week at United Tel-o-auction were substantially higher than two weeks ago. The prices at United by weight groups were: 50-60 pounds $60-75 per cwt and one load of 65 pounds at $45 per cwt. The lower feed prices and strong futures prices for lean hogs are reflected in these stronger pig prices.

The rate of decline in the live weight of barrows and gilts in Iowa-Minnesota slowed last week with the weight at 257.4 pounds per head, down 0.1 pound from a week earlier but 3.1 pounds below a year earlier.

Pork exports in June were down 3.1 percent from May but up 113 percent from June 2007. China and Hong Kong were the largest importers of U.S. pork in volume, but Japan continues to be the number one importer of pork in value.

Pork exports for January-June were up 68.5 percent from 12 months earlier. Pork imports for these six months were down 14.7 percent. Net exports as a percent of production at 17.82 in 2008 were up from 9.25 in 2007. This net export of pork is the major factor in driving the exceptionally strong demand for live hogs in the U.S.

Our pork exports to Japan in January-June were up 18.4 percent, Mexico up 27.6 percent, Canada up 23.5 percent, South Korea up 18.6 percent, Russia up 140.7 percent, China-Hong Kong up 423 percent, Taiwan up 8.6 percent, Australia up 22.1 percent, and other countries up 117.5 percent. Every major market for U.S. pork exports is stronger in 2008 than a year earlier.

It is now obvious that one must be able to estimate pork exports to be able to predict hog prices with any precision. We now have weekly export data for beef, and we need the same information for the pork industry.

Pork product prices this Thursday afternoon at $93.89 per cwt were up $1.93 per cwt from a week earlier.

The top live hog prices this Friday were steady to $1.50 per cwt higher compared to seven days earlier. The weighted average negotiated carcass prices this Friday morning were $2.21-3.43 per cwt lower compared to last Friday.

The top live prices Friday morning for select markets were: Peoria $56 per cwt, Zumbrota, Minnesota $61 and interior Missouri $59.50 per cwt.

The weighted average carcass prices for negotiated hogs by area were: western Cornbelt $85.43 per cwt, eastern Cornbelt $83.46 per cwt, Iowa-Minnesota $85.44 per cwt and nation $83.89 per cwt.

Hog slaughter this week under Federal Inspection was estimated at 2,143 thousand head, up 7.9 percent from last year.

5m Editor