Hog Outlook: Another Fabulous Week for Hog Prices

US - Hog futures continue to set new records highs daily. The April lean hog futures contract settled at $113.00/cwt today, up $6.15 from the previous Friday, write Ron Plain and Scott Brown.
calendar icon 10 March 2014
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May hog futures ended the week at $117.75/cwt, up $6.35 from the week before. June hogs gained $8.28 to close at $120.50. The July contract ended the week at $118.55/cwt, up $7.10 for the week. August closed at $116.77/cwt. Prior to February 2014, no hog futures contract had ever closed above $108/cwt.

It also has been another fabulous week for hog prices. The national average negotiated carcass price for direct delivered hogs on the morning report today was $102.88/cwt, up $4.85 from last Friday, up $20.34 from three weeks ago, and up $28.65 from a year ago. The eastern corn belt reported a morning average of $103.08/cwt. Neither Iowa-Minnesota nor the western corn belt had a price quote this morning. Peoria had a top live price today of $68/cwt. Zumbrota, MN topped at $74/cwt. The top price Friday for interior Missouri live hogs was $72.75, up $6.00 from the previous Friday.

Friday morning's pork cutout value was $111.09/cwt FOB the plants, up $6.42 from the week before and up $32.18 from a year ago. This morning's hog carcass price averaged 92.6 per cent of the cutout value.

The number of new cases of PED virus continues to climb. Each of the last five weeks increased the number of farms with the disease by more than 250. As of 23 February, the total number of infected swine farms was 4,106. (There is an uncertain amount of double counting in this data.)

Statistics Canada reported the 1 January inventory of hogs and pigs in Canada was up 1.1 per cent from a year ago. Their breeding herd inventory up 0.3 per cent and their inventory of market hogs was up 1.1 per cent. The Canadian swine herd is roughly one-fifth the size of the US herd.

The Bureau of Labor Statistics says non-farm payroll increased by 175,000 jobs in February. That is a good sign for the economy and for meat demand.

Hog slaughter this week totaled 2.052 million head, down 4.8 per cent from the week before and down 6.6 per cent compared to the same week last year. This is the first week with pork production below the year-ago level since the week ending 11 January.

The average live weight of barrows and gilts in Iowa-Minnesota last week was 281.8 pounds, down 0.4 pound from a week earlier, but up 5.7 pounds from a year ago.

Corn futures rallied this week to bring the nearby contract to the highest price since September. March corn futures ended the week at $4.81/bushel, up 23 cents from the week before. May corn settled at $4.89/bushel. The July corn futures contract ended the week at $4.93/bushel.

March soybean meal ended the week at $465/ton, down $2.90 for the week. May meal futures closed at $457.80/ton.

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