July 13, 2010

US sow slaughter down 12.4%

US sow slaughter has dropped off in recent weeks by 12.4% during the seven weeks ending on June 26 compared to a year earlier, according to industry analysts.

Part of the decline was due to a nearly 22% drop in imports of cull sows from Canada. Part was due to fewer US sows available for slaughter – spring farrowings were down 4.7%. Adjusted for these two factors, sow slaughter was still down 5% compared to a year earlier.

Compared to their June forecast, USDA's July corn supply and demand estimates are for smaller stocks and lower, but still record, corn production. They are now forecasting a corn price close to US$3.55 per bushel for the marketing year ending on August 31 and a price close to US$3.75 for the year beginning September 1.

USDA raised their forecast of this year's soy harvest by 35 million bushels, but they also raised their forecast of crush and exports. The result is a soy price forecast of about US$8.85 bushel, up a dime from last month's prediction. They are forecasting soymeal at US$240-280 per tonne for the 2010-11 marketing year.

USDA's Thursday afternoon calculated pork cutout value was US$82.94/cwt, up 62 cents earlier.

Meanwhile, the national weighted average carcass price for negotiated hogs last week was US$74.79/cwt, US$1.77 lower than the previous week.

This week's hog slaughter totalled 1.716 million head, down 13% from the week before and down 12% compared to slaughter during the same week last year, which did not include July 4. Year-to-date, pork production is down 4.1%.

The average carcass weight of barrows and gilts slaughtered the week ending 26 June was 199 pounds, down one pound from the week before and up two pounds compared to a year ago. Iowa-Minnesota live weights last week averaged 268.4 pounds, up 5.2 pounds compared to a year earlier. Weights should continue to decline due to high summer temperatures.

The July lean hog futures contract ended the week at US$78.62/cwt, up 42 cents from the previous Friday. The August contract settled at US$80.02 down 3 cents for the week. October closed the week US$1.35 higher at US$75.10/cwt and December ended the week at US$72.65/cwt.

The July corn contracted ended the week at US$3.75, up 11 cents from the previous Friday. July soymeal futures gained US$19.20 this week to settle at US$314.10 per tonne.