November 8, 2007

US Cash Hogs: Bids remain weak on huge supplies

The Midwest direct hog markets remain weak due to a continuation of record-large supplies of slaughter-ready hogs available to the processing plants.

Cash bids are reported from US$0.50 to US$1.50 per hundredweight lower near midday Wednesday (November 7).

A few plants in the western Corn Belt are still adding to their bookings for Saturday's slaughter but they are close enough to full that the buyers expect to get all they need at flat to weaker prices.

Expectations for the weekend slaughter have expanded a bit from earlier in the week and are now mostly from 200,000 to 205,000 but a few predictions up to 220,000 have been seen.

Market analysts and livestock dealers said expanded processing margins are encouraging packers to push additional hogs through the plants this weekend.

This week's total is expected to exceed 2.3 million head for the sixth consecutive week. The week ended October 5 was the first time slaughter reached 2.3 million.

The US Department of Agriculture reported the average weight for barrows and gilts in Iowa last week at 269.7 pounds, up 2.0 pounds from the previous week and 0.4 pound above a year ago. The heavier weight is a bearish factor for prices, analysts and market managers said, because the extra weight adds to total pork production plus is an indicator that supplies may not be as current as had been thought.

Predictions for prices today are flat to weaker.

The terminals are trading from steady to as much as US$2 lower with tops from US$30 to US$34.50 on a live basis.