During the seven weeks ending on 26 June, sow slaughter was down 12.4 per cent compared to a year earlier. Part of the decline was due to a nearly 22 per cent drop in imports of cull sows from Canada. Part was due to fewer US sows available for slaughter – spring farrowings were down 4.7 per cent. Adjusted for these two factors, sow slaughter was still down five per cent compared to a year earlier. Producers are once again making money, so reduced sow slaughter is not surprising. It is very important for the industry that the sow herd not grow too quickly pushing up hog slaughter and forcing prices back below break-even. There is a real need to rebuild equity.

Compared to their June forecast, USDA's July corn supply and demand estimates are for smaller stocks and lower, but still record, corn production. They are now forecasting a corn price close to $3.55/bu for the marketing year ending on August 31 and a price close to $3.75 for the year beginning 1 September.

USDA raised their forecast of this year's soybean harvest by 35 million bushels, but they also raised their forecast of crush and exports. The result is a soybean price forecast of about $8.85/bu, up a dime from last month's prediction. They are forecasting soybean meal at $240-280 per ton for the 2010-11 marketing year.

USDA's Thursday afternoon calculated pork cutout value was $82.94/cwt, up 62 cents from the previous Thursday.

The national weighted average carcass price for negotiated hogs Friday morning was $74.79/cwt, $1.77 lower than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $74.85, western corn belt $74.63, and Iowa-Minnesota $75.29/cwt. The top live hog price Friday at Sioux Falls was $55/cwt. Peoria topped at $52 on Friday and Zumbrota, MN had a top price of $54. The interior Missouri live top Friday was $52.75/cwt, down $1.50 from the previous Friday.

This week's hog slaughter totalled 1.716 million head, down 13 per cent from the week before and down 12 per cent compared to slaughter during the same week last year, which did not include 4 July. Year-to-date, pork production is down 4.1 per cent.

The average carcass weight of barrows and gilts slaughtered the week ending 26 June was 199 pounds, down one pound from the week before and up two pounds compared to a year ago. Iowa-Minnesota live weights last week averaged 268.4 pounds, up 5.2 pounds compared to a year earlier. Weights should continue to decline due to high summer temperatures.

The July lean hog futures contract ended the week at $78.62/cwt, up 42 cents from the previous Friday. The August contract settled at $80.02 down 3 cents for the week. October closed the week $1.35 higher at $75.10/cwt and December ended the week at $72.65/cwt.

The July corn contracted ended the week at $3.75, up 11 cents from the previous Friday. July soybean meal futures gained $19.20 this week to settle at $314.10/ton.