Evening Report (VIP) --March 28, 2013

March 28, 2013 10:10 AM
 

HOGS & PIGS REPORT: MILD HERD EXPANSION... Traders did a fairly good job pegging the report, with most of the categories coming within the pre-report guess ranges. The "misses," however, were on the top side of the ranges, giving the data a mildly negative tone.

Quarterly H&P Report

USDA

Avg. trade guess

Range

% of year-ago

All Hogs and Pigs

101

100.7

100.3-101.6

Kept for breeding

100

100.3

99.7-101.2

Kept for marketing

102

100.8

100.3-101.7

Dec-Feb pig crop

102

101.2

100.6-101.7

Dec-Feb pigs per litter

101

101.1

100.6-101.5

Dec-Feb farrowings

101

100.1

99.7-100.3

Mar-May farrowing int.

99
98.7

97.9-99.8

Jun-Aug farrowing int.

99

100.9

98.9-101.6

Hogs under 50 lbs.

101

100.9

100.4-101.5

Hogs 50 to 119 lbs.

101

100.7

100.1-102.7

Hogs 120-179

102

99.9

99.4-101.5

Hogs 180 and over

102

101.6

99.7-103.8

A slightly bigger-than-expected market hog inventory signals hog slaughter will continue to outpace year-ago moving forward. Breaking down the market hog numbers, the kill pace should run roughly 1% above year-ago through spring and summer. With abundant pork supplies in storage and a bigger-than-expected supply of hogs coming to market, there will continue to be pressure on demand to chew through supplies.

The winter pig crop came in 2% higher than year-ago thanks a pickup in farrowings and continued strong efficiency in the farrowing house as pigs per litter continue to trend higher.

Spring and summer farrowing intentions signal producers intend to trim production -- or at least that's what they indicated to USDA. But if there's a drop in feed prices, as expected, those intentions could change. After all, record-high feed prices triggered very little herd contraction last summer and fall, and we're hearing herds are being actively expanded in some areas of the Corn Belt.

 

SHARP NEGATIVE PRICE RESPONSE FROM USDA REPORTS.... While anticipation was high ahead of USDA's Prospective Plantings Report, it was the Quarterly Grain Stocks Report that spurred a sharp price reaction from the market. Higher-than-expected corn, soybean and wheat stocks weighed heavily on markets despite planting intentions that were neutral to friendly. Click here for the full report reaction.

 

TRADE MISSION RETURNS FROM CHINA WITH BRIGHT OUTLOOK... Market participants expect Chinese demand for corn and soybeans to continue rising, but a recent trade mission to the country provides a strong reminder of the country's growing appetite. Leaders with the Iowa Soybean Association (ISA) returned earlier this week from a trade mission to China and say the consensus is "if we can grow it, they will buy it." Grant Kimberley, ISA Director of Market Development, tells us one Chinese feed mill manager expects China's soybean imports to rise from about 60 MMT this year to 80 MMT in the next three to five years, along with corn imports rising to 20 MMT to 30 MMT annually. Click here for a link to the full conversation with this buyer.

 

HAPPY EASTER! HE HAS RISEN!... Everyone at Pro Farmer wishes you a happy Easter and this reminder from John 11:25-26: Jesus said to her, "I am the resurrection and the life. The one who believes in me will live, even though they die; and whoever lives by believing in me will never die. Do you believe this?"

Markets are closed tomorrow for Good Friday. USDA offices are open, but no reports are scheduled due to the market closure. As a result, there will be no Pro Farmer updates tomorrow. We'll be back on Monday, April 1, with full coverage beginning with "First Thing Today." Happy Easter!

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