Pig Report and market looks to Washington over weekend

Published on: 15:22PM Sep 26, 2008

 

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Live Cattle

Feeder Cattle

Lean Hogs

LCV8

100.95

Unch

FCV8

105.80

-1.05

LHV8

69.625

+0.35

LCZ8

102.80

+0.175

FCX8

105.575

-0.80

LHZ8

66.05

-0.075

LCG9

103.075

-0.70

FCF8

105.80

-0.70

LHG9

71.85

-0.425

 

Index

107.74

+0.11

Index

70.81

 

 

Live Cattle: 

  • Reports from the field are indicating better than average yields on Beans and "early planted" corn

 

Live cattle settled mixed with the near-by's holding firm against this week's cash trade; while the differed months followed lower corn and feeder markets. Box beef took a hit today with choice down 2.58 and select down .72. Weekly volume totals for short rib for the second week were poor, running 50% of the five yr weekly average. Last spring we were working with weekly sale at 150% above the five year. This is a problem and needs to improve going into the pre-holiday market. We are still looking for 4th quarter supplies to be tight on firm marketing and light placements. Exports remain modest verses last year; we still haven't seen the one-two knock out punch many of us had expected last spring. Domestic sales are sloppy by all accounts as HRI has adjusted portion sizes and consumer purchasing trends.  We would be a buyer of the Feb 09 cattle on breaks verse the April.  The over all supple news should be supportive in the up coming weeks. Box Beef volume for the week was sloppy. This will continue to keep the rallies in check....so trade the ranges for now.

 

 

Boxed Beef Cutout Values

Choice

Select

Loads

155.42

-2.58

149.95

-0.72

257

Choice/Select spread settled at 5.47 -$1.86

Slaughter

Wk Ago

Yr Ago

WTD

Yr Ago

120,000

121,000

121,000

628,000

627,000

 

Feeder Cattle: 

 

Feeder cattle closed lower for the day, with Oct leading the way down.  Feeder cattle experienced a sell off mainly because of the apparent state of markets in general.  There are concerns of financing cattle at these prices given the current financial market and tightening of credit.  The "bail out" plan is still being restructured and many people thought it would already be passed at this point.  In addition, cash cattle sales this week were steady to weaker, but many expected a firmer trade to occur.  The lead month October led the way down today and this should result in further losses to the CME index.  Today's action put feeder cattle back near support levels.  Another sharp break could be bought, but watched closely as the trade has not yet turned the corner on bearish outlooks for cattle yet.  If live cattle struggle next week, there will be more downside in feeders.

 

 

Lean Hogs: 

Terminal market hogs were steady with prices at $46.50-$49. Direct hog markets were higher with the IA/So.MN direct market at $72.07 up $.61, Western cornbelt $71.85 up $.31, Eastern cornbelt $68.08 up $.16 and the National average at $70.45 up  $.24.

 

¨      Hogs and pigs report Today

·        Actual      aver guess

All hogs                      102      102.1         100.5-103.7

Kept for breading        97        97.3          95.5-98.1

Marketing                  103      102.5         100.9-103.6

Under 60                    100      100 

60- 119                        101      101.9

120-179                       106      103.8

180- up                        106      105.3

¨      Smithfield Foods announced effective April 2009 American born, raised, processed label on all fresh retail products
 

Lean hogs closed mixed as the trade even positions ahead today’s pig crop report. Looking Ahead: We are looking for next another strong slaughter next week (2320,000); cash is called steady bid. We are hearing reports of buyers still trying to schedule hogs for hast half of the week. Today’s cutout was reported Dn .52 as hams and loins lead the way again.  This may be an indication that exports have backed off a touch, certainly production is higher than expected’ last weeks slaughter was approximately 145,000 higher than last year’s big numbers. Demand remains strong but needs to be watch closely; the firming dollar will have an effect on pork exports. 

 

PIG Crop: For practical purposes the report showed production in line with the average trade guesses. And we are calling the market 25-50 lower for Dec and Feb. The 60- 119 break down reported 106 % vs. average guess 103.8% which should pressure the 4th / 1st quarter futures as we mentioned early this week. Look for Oct futures to stay firm vs. the Dec and Feb and June hogs to gain on everything. The wild cards which still exist are 1) what is our export business? 2) Jun- Aug pig crop was 102% - pigs per liter for Jun-Aug 9.6 (9.4) for 5000+ producers.  Great Job!!!!! Efficiencies are great as all as everything is working well.  On a side note…the report also shows why April 09 was picked for “US born” pigs; keep in mind if you are producing product and the buyer can create a two tear market; the buyer of your product will always use the lower prices to there advantage, especially when COOL does not apply to processed product or HRI uses.

  

 

Pork Carcass Cutout Values

 

 

Loads

74.23

-0.52

43.5

Slaughter

Wk Ago

Yr Ago

WTD

Yr Ago

434,000

434,000

413,000

2,168,000

2,088,000

 

 

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