Annual price peak is behind us

Aug 28, 2023

The 51-52% lean liveweight hog price averaged $73.92/cwt in July, the highest month since the previous August. It looks like August 2023 liveweight prices will average close to $68/cwt.  The seasonal trend is for lower hog prices each month until the end of the year. USDA says the 51-52% lean average price was $56.69/cwt in the second quarter and is predicting $74/cwt for the third quarter and $63/cwt for the fourth quarter. I fear USDA’s liveweight price forecast is too optimistic.

The national average negotiated prior day carcass price exceeded $100/cwt for 16 days in July and August. Last Friday it was trading in the mid $80s. The October contract is trading a bit under $80/cwt and December a bit over $72/cwt. The lean hog futures contracts imply lower hog prices each month through December followed by higher hog prices each month until July. There is nothing surprising about that. 

Corn futures are trading in the high $4s per bushel for September and December and the low $5s for next year. There has been a great deal of volatility in corn futures this year. I expect it to continue. The corn futures price range for the next 16 months is currently $4.70 to $5.15 per bushel. USDA is forecasting corn prices for the 2023-24 marketing year will average $4.90/bushel, down from $6.60/bushel for the current year.

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