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| USDA crop report offers acreage likened to 1946 |
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The big news this week was USDA’s June 30 plantings report. USDA said actual corn acres planted in 2009 is 87 million, up 2 million from their March estimate and the second largest acreage since 1946. Soybean acreage was up 1.5 million and wheat up 1.1 million compared to the March forecast. Most corn futures contracts closed down the 30 cent limit on Tuesday. The December corn futures contract ended the week at $3.575 per bushel, 46.75 cents lower than it started. If corn averages $3.50 per bushel, the breakeven price for hogs should be close to $50 percwt live.
USDA’s June Hogs and Pigs report had few surprises. The breeding herd is down 2.7 percent, summer farrowings are expected to be down 3.3 percent, and fall farrowings off by 2.2 percent. But, increased productivity is offsetting much of this decline. Pigs per litter were up 2.5 percent in March-May and have averaged 2.45 percent higher for the last four quarters. Over the last six weeks, barrow and gilt carcass weights have averaged 2 percent higher than a year earlier. Hog slaughter in the second half of 2009 is expected to be down 3 percent or so. Due largely to fewer Canadian hogs coming south, the June 1 inventory of market hogs weighing less than 60 pounds was down 2.4 percent even though the March-May pig crop was only down 0.3 percent.
A strong surge on Thursday brought western Corn Belt carcass prices above week-earlier levels and above the cutout value. The top price Thursday at Zumbrota, Minn. was $37 per cwt. Peoria had a top of $35 per cwt. The interior Missouri top Thursday was $40 per cwt, unchanged for the week. The national weighted average carcass price Thursday morning for negotiated hogs was $56.83 per cwt., $1.67 higher than the previous Friday but $11.52 per cwt. lower than a year ago.
USDA’s Wednesday afternoon calculated pork cutout value was $53.77 per cwt., down $1.09 from the previous Thursday. Hams were higher than the week before but loins, bellies, and Boston Butts were lower. At this time last year, the pork cutout was over $78 per cwt. This week’s hog slaughter is estimated by trade sources to be 1.87 million head, up 9.2 percent compared to the same week in 2008 (the 4th came on Friday last year).
The average carcass weight of barrows and gilts slaughtered the week ending June 20 was 199 pounds, 5 pounds heavier than for the same week in 2008. Iowa-Minnesota live weights last week averaged 265.1 pounds, up 3.4 pounds compared to last year.
The July lean hog futures contract ended the week at $59.97 per cwt., up $3.27 from last Friday. The August contract settled at $61.15 today, up $3.45 for the week. October closed the week at $57.17 per cwt. and December closed at $58.25 per cwt. Hog producers have lost money 19 of the last 21 months. Today’s prices are roughly $15 per head below breakeven. Higher prices are badly needed. |
| 7/8/2009 |
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