Ron Plain: Hog Outlook - March Corn Settled at $3.9425/bu.

Nov 14, 2014
Hog Outlook
Ron Plain and Scott Brown
University of Missouri
November 14, 2014
The November WASDE lowered USDA's forecast of 2014 pork production by 97 million pounds (0.4%) and lowered their production forecast for next year by 305 million pounds (1.3%). They now predict 2014 pork production will be down 2.3% from last year to the lowest level since 2010.
USDA's forecast for live hog prices in 2014 is for an average somewhere around $76.60/cwt which is far above the record of $66.12/cwt set in 2011. They are predicting 4.2% more pork in 2015 than this year with an average live hog price of $65.50/cwt.
Total red meat and poultry production is forecast to be 1.6% higher in 2015 than this year.
USDA lowered their forecast of 2014 corn production by 68 million bushels and raised their forecast of the seasonal average corn price by 10 cents to between $3.20 and $3.80 per bushel. They left the midpoint of their soybean price forecast unchanged at $10/bu.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $84.10/cwt, up 76 cents from last Friday and up $5.25 from a year ago. There were no western corn belt or Iowa-Minnesota reported negotiated prices this morning. The eastern corn belt averaged $84.06/cwt on today's morning report.
Peoria had a top live price today of $58/cwt. The top price Friday for interior Missouri live hogs was $60.75/cwt which was the same as the previous Friday.
After four weeks of decline, Friday morning's pork cutout value was $96.58/cwt FOB the plants, up $2.72 from the week before and up $3.24 from a year ago. Compared to a year ago, loins are up by $5.54/cwt, hams are up $9.23/cwt but bellies are $32.44/cwt lower. Ham prices are within a dollar of both loins and bellies.
This morning's hog carcass price averaged 87.1% of the cutout value.
Hog slaughter this week totaled 2.219 million head, down 0.6% from the week before and down 5.4% compared to the same week last year. This was the 38th consecutive week with hog slaughter below the year-earlier level.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week, 285.7 pounds, was up 0.5 pounds from a week earlier and up 4.9 pounds from a year ago. Iowa-Minnesota weights have been above year ago for 84 consecutive weeks.
The December lean hog futures contract closed at $92.67/cwt, up $3.90 for the week. February hog futures ended the week at $92.75/cwt, up $4.33 from the week before. April hogs gained $3.75 this week to close at $93.85/cwt. The May contract ended the week at $94.00/cwt. June closed at $97.47/cwt.
Corn futures were higher this week. The December contract gained 14 cents this week to end at $3.8175 per bushel. March corn settled at $3.9425/bu.
Sorce: AgEBB
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