Ron Plain : Hog Outlook

Ron Plain and Scott Brown
Ag Economics, MU
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USDA's June acreage report says there were 94.1 million acres of corn planted this year. That is 7% more than last year and the third most corn acres in the last 70 years (after 2012 and 2013). Soybean acres planted total 83.7 million, which is up 1% from last year and a new record.

The June grain stocks report says there were 4.72 billion bushels of corn in storage at the start of June. That is 6% more than a year earlier. Calculated disappearance during March-May was down 200 million bushels from last year. Soybean stocks totaled 981 million bushels, up 30% year-over-year.

The futures market's reaction to these numbers was lower corn prices and higher soybean prices. Corn stocks, corn acreage and soybean stocks were higher than the average of pre-release trade estimates. Soybean acres were below the trade forecast.

USDA's Crop Progress report says that 75% of corn acres were in good to excellent conditions on June 26. That is the same as a week earlier and 7 points higher than on that date last year.

USDA's June hog inventory survey found more hogs than expected and hog prices were lower this week. The national negotiated barrow and gilt carcass price averaged $78.35/cwt on Thursday, down $2.95 from a week earlier, but up $5.14 from a year ago.

The national negotiated barrow and gilt price averaged $76.96/cwt on the morning report today, down $3.31 from a week earlier, but up $4.73 from a year ago. Both the western corn belt and Iowa-Minnesota averaged $77.51/cwt this morning. There was no negotiated price quote this morning for the eastern corn belt.

The top hog price today at Peoria was $49/cwt, down $2 from a week earlier. Today's top price for interior Missouri live hogs was $55.50/cwt, the same as last Friday.

Friday morning's pork cutout value was $89.33/cwt FOB the slaughter plants. That is up 42 cents from the week before and up $8.85 from a year ago. Ham and belly prices were higher than last Friday, loins lower. This morning's national negotiated hog price is 86.2% of the cutout value.

This week's hog slaughter totaled 2.115 million head, up 0.8% from last week and up 13.8% from the same week last year. Independence Day was during this week last year.

The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 277.8 pounds. That is down 0.4 pound from the week before and down 0.8 pound from the same week last year.

The July lean hog futures contract ended the week at $82.675/cwt, down $1.375 from the preceding Friday. Today, August hogs settled at $83.95/cwt, down $1.025 from last Friday. The October contract settled at $72.35, up 40 cents for the week.

Corn futures fell sharply for the second week in a row. The July contract lost 31.5 cents this week to close the week at $3.53 per bushel. September futures closed 29 cents lower than last Friday at $3.60/bu. December corn futures ended the week at $3.67/bushel, down 27.25 cents from last Friday.


Source: Ageeb