July 18, 2012

US corn and hog prices rise

In comparison to 48% the week before and 69% a year ago, USDA has estimated 40% of US corn crop to be in good or excellent condition on July 8.

The Crop Progress report says 40% of the soy crop was rated good or excellent in July compared to 45% a week earlier and 66% a year ago. Nationally, 50% of pastures were rated poor or very poor on July 8. That compares to 43% poor or very poor the week before and 29% a year ago. For Missouri pastures, the number is 87% poor or very poor.

USDA's July crop report lowered predicted corn yield to 146 bushels per acre and raised the predicted marketing year price to US$5.90 per bushel. The July corn futures contract ended the week at US$7.5575 per bushel, up US$0.13 from the week before and up US$1.76 from four weeks earlier. December corn ended the week at US$7.405 per bushel. July soy meal ended the week at US$489.90 per tonne, up US$18.30 from the previous Friday.

Iowa State University calculations put the breakeven price for markets hogs sold in June at US$65.12 per counterweight, the highest since December. Fortunately, hog prices jumped and the average June profit was US$22.40 per head sold. During the first half of 2012, the average hog was sold at a profit of 69 cents per head.

Pork exports during May were up 9.6% from a year ago and pork imports were down 2.7%. For the month, exports equalled 23.3% of production and imports equalled 3.3% of production. During the first five months of 2012, pork exports were up 265 million pounds (12.8%) with 70% of the increase going to China.

USDA's recent calculated pork cut-out value was $89.51 per counterweight, down US$1.13 from the previous Thursday and US$9.15 lower than this week last year. Bacon demand continues to be strong. Pork bellies are at US$138 per counterweight, up US$5.07 from a week ago, up US$8.42 from a year ago, and the highest since August 22.

Hog prices dropped this week. The national average negotiated carcass price for direct delivered hogs on the morning report was US$88.46 per counterweight, down US$6.87 from last Friday. The eastern corn belt averaged US$87.65 per counterweight. The western Corn Belt averaged US$92.48 per counterweight. Iowa-Minnesota averaged US$92.92 per counterweight on the morning report. The east-west price spread remains very large. Peoria had a top live price this morning of US$61 and Zumbrota had a live top today of US$62 per counterweight. The top for interior Missouri live hogs Friday was US$67.50 per counterweight, down US$1.50 from the previous Friday. The average hog carcass price is 98.8% of the cut-out value.

Hog slaughter this week totalled 1.959 million head, up 11.6% from the week before because of the July 4 holiday, but down 3.6% compared to the same week last year. The average barrow and gilt live weight in Iowa-Minnesota last week was 269.0 pounds, down 1.0 pound from a week earlier, up 2.4 pounds from a year ago, and above year-earlier for the 33rd consecutive week.

Friday's close for the July lean hog futures contract was US$97.22 per counterweight, up US$1.00 from the previous Friday. August hogs settled at $90.40 per counterweight, down US$2.90 for the week. October hogs ended the week at US$79.47 per counterweight.