September 13, 2007

US Cash Hogs Midday: Prices mostly steady on weekend demand

Interior Midwest cash hog prices Wednesday (September 12) were about steady with Tuesday as increased demand keeps up with higher numbers coming to market, buyers and traders said.

Most packers are having little trouble filling their slaughter schedules with the current runs, but plans for Saturday's slaughter appear to be very large, buyers said. Estimates for the volume to be slaughtered over the weekend run up to 150,000 heads, which would bring the weekly slaughter near 2.2 million, one buyer said.

An eastern Midwest buyer said packers there appear to have their needs met for now, and he expected prices to be softer - maybe US$0.50 per hundredweight - on Thursday.

Hog producers are trying to get ahead on their marketings as corn harvest gains momentum, but are having a difficult time due to abundant hog supply for slaughter, the eastern buyer said. If producers ever get behind this year, they will have a hard time catching up, he said.

A western buyer said the need for more hogs to kill on Saturday was to keep prices firm. Packers appear to be filling the slaughter schedule and are willing to step in and pay steady prices for the inventory.

But even if packers filled their nearby slaughter needs, they may not "hammer" the market too hard, buyers said. Packers see the harvest gearing up and don't want to run the risk of having to pay higher prices later to get farmers off their combines and moving hogs to market, they added.