Ron Plain and Scott Brown
University of Missouri
September 11, 2015
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USDA's September supply and demand estimates had few big surprises. The monthly WASDE lowered their forecast of 2015 corn production by 101 million bushels (0.7%) and raised expected soybean production by 19 million bushels (0.5%). USDA raised their corn price forecast by 10 cents and left their forecast of average soybean price unchanged. They expect the marketing year corn price to average between $3.45 and $4.05 per bushel.
For meats, USDA lowered their prediction of 2015 production of beef, pork, broilers and turkey. The September forecast of red meat and poultry production is 0.6% lower than the August forecast, but 2.4% higher than last year's production. USDA is predicting 2016 beef production will be 5.9% more than this year, pork will be up 0.7%, broilers up 2.7%, and turkey up 7.9%.
USDA raised their forecast of 2015 average hog prices by $1 to $50-$51/cwt of live weight and left their 2016 slaughter hog price forecast average unchanged at $46-49/cwt.
USDA expects both pork imports and exports to be slightly higher this year than last. They are predicting that pork exports will increase again in 2016 but they expect pork imports will decline slightly.
Through July, imports of live hogs were up 16.5% with feeder pig imports up 12.2% and other imports up 38.6%.
Because of the Labor Day holiday, this week's hog slaughter totaled only 2.04 million head, down 6.0% from last week and down 0.5% from the same week last year.
The national negotiated barrow and gilt price on the morning report today was $64.48/cwt, down $3.26 from last Friday morning. Both the western corn belt and Iowa-Minnesota averaged $64.26/cwt this morning. Both were $3.51 lower than last week. There was no negotiated price quote this morning for the eastern corn belt.
Peoria had a top live price today of $44/cwt, down $1 from last Friday. The top price today for interior Missouri live hogs was $46.75/cwt, unchanged from the previous Friday.
This morning's pork cutout value was $84.37/cwt FOB the plants. That is down 63 cents from the week before. Packer margins continue to be very good. This morning's national negotiated hog price was only 76.4% of the cutout value.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 277.4 pounds, up 0.4 pound from a week earlier, but down 4.7 pounds from a year ago. This was the 24th consecutive week with weights lighter than last year.
The October lean hog futures contract settled today at $67.325/cwt, down $1.825 for the week. December hog futures ended the week at $62.65/cwt, down 70 cents from the week before. February hogs lost $1.15 this week to close at $66.65/cwt. The April contract ended the week at $70.35/cwt.
The September corn futures gained 25 cents this week to close at $3.745/bushel.
Source: AGEBB