June 30, 2008

Higher than expected numbers from USDA to pressure hog futures 

Analysts called Friday's USDA quarterly hog report bearish for lean hog futures because of larger-than-expected results for several categories.

The figure for all hogs and pigs as of June 1 was put at 106.0 percent compared with analysts' average forecast of 104.6 percent and a range that was from 103.4 percent to 105.7 percent.

USDA pegged kept for breeding at 99.0 percent compared with the average of analysts' prediction of 98.6 percent and their projected range of 97.3 percent to 99.3 percent.

The USDA put hogs kept for marketing at 107.0 percent compared with the average estimate at 105.1 percent, ranging from 103.8 percent to 106.5 percent.

Analysts suspect CME 2008 hog futures could tumble as much 200 points following Monday's open as a result of Friday's data despite some of the report's bearishness that was built into the market well before the survey's release.

Most of USDA's numbers, market watchers said, were near or exceeded the high end of expectations and came in much higher than most anticipated.