Hog
Commentary for
June 30th 2004
Hog
Markets
The USDA released its quarterly Hogs & Pigs report this
past Friday. All hogs and pigs were reported at 100.8% of year
prior numbers, breeding herd at 98.5% of the year prior number
and hogs for marketing at 101.1%. These results were in line
with what the market had expected and did not result in a major
change to future prices. Slaughter numbers continue to be well
above year ago numbers (3.7% last week) yet packers are finding
it difficult to get enough hogs. Unlike earlier in the year
when prices fell sharply in the two weeks ahead of holidays,
the cash market held steady last week.
Cash prices are expected to drop slightly this week as most
packers are taking time off next Monday. The cash price is not
expected to drop slightly this week as most packers are taking
time off next Monday. The cash price is not expected to drop
as much as it has in other short weeks, since producers are
current in marketing and demand continues to remain strong.
Should the cash only drop $3-4 the futures market should hold
steady.
Grain
Markets
The liquidation by funds in corn has further depressed the futures
while cash prices started the week steady. Availability of cash
corn has been further reduced as lower prices keep corn owners
looking for better opportunities. Crop conditions for the new
crop in the US improved slightly to 71% good-to-excellent from
70% last week. Acre estimates to be released tomorrow morning
before the open along with grain stocks will provide direction
to the market to start July. Pollination is only weeks away
with weather conditions favorable. Heat across Midwest and Plains
regions to come later in July could result in weather premiums
within the next 2-3 weeks.
Cash soymeal continued to climb over the past week driven higher
by firming basis levels across the Midwest. Nearby futures traded
within a $1.00 US from a week earlier however a $15.00 US break
on Monday was the reason behind the nearly unchanged futures
levels. A suspected case of Mad Cow in the US over the weekend
was negative to all feed markets as concerns for overall domestic
demand was weakened. Soybean crops in the US were reported at
66% good-to-excellent compared to 67% last week and 70% last
year while trade estimates expected a slight increase earlier
this week. Rumours of soybean imports to the US provided some
of the selling pressure seen in the market over the past week
however dates and quantities continue to be unknown. Breaks
in the market should be viewed as buying opportunities for Jul
through Sep meal.
