May 21, 2009
US cash hogs pre-open seen weak to as much as US$2 lower
Cash hog prices in the Midwest Wednesday (May 20) are expected to trade weak to as much as US$2 per hundredweight lower on ample supplies and slim buying interest ahead of the Memorial Day holiday weekend.
The major packers appear to be full for this week, and some are well booked into early next week, according to livestock dealers and market managers. They also said that some plants may be out of the market the balance of the week.
Deliveries of contracted supplies and additional marketings by some of the larger operations ahead of the holiday have contributed to the run for this week, said analysts and dealers. Since all plants will be closed Monday, buyers will bid cautiously for deliveries the middle of next week.
The US Department of Agriculture reported the average hog weight for barrows and gilts in Iowa/southern Minnesota last week at 269.2 pounds. That was down 0.2 pound from the previous week but 6.4 pounds above a year ago. Analysts said the extra weight is contributing to the weak hog prices because more pork is being produced from each hog, compared with a year ago.
The weekend slaughter is expected to be from 20,000 to 25,000 head, which should put the week's total around 2.05 million to 2.06 million head.
Wholesale pork prices Tuesday fell US$1.11 to US$59.52. The Dow Jones Newswires pork packer margin index was at minus US$5.16 per head, compared with minus US$7.08 the previous day.
The terminal markets are called flat to lower with top prices projected to be in a range from US$37 to US$40 on a live basis.
The projected Chicago Mercantile Exchange two-day lean hog index for Monday was 63.70 cents per pound, up 0.54 cent from the previous day.
