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News: 150 days from birth is the average time you need to sell your pigs for slaughter and it is about 85 kgs on average.
 
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Author Topic: American Hog News USDA  (Read 42577 times)
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Mustang Sally Farm
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« Reply #510 on: July 15, 2012, 05:14:51 AM »


US Hog Margins, 4 July 2012
05 July 2012

 

US - Margins deteriorated sharply over the past two weeks primarily due to soaring feed costs. Margins would actually have been even worse if not for a late month recovery in hog prices, particularly in nearby contracts, writes Doug Lenhart, General Manager of Genesus USA.

Projected hog finishing margins are now well below average as well as negative in both Q4 and Q1 following readings near or above the 90th percentile earlier this year.
 



Genesus Global Market Report
Prices for the week of June 24, 2012
 


Country

Domestic price
(own currency)

US dollars
(Liveweight a lb)
 


USA (Iowa-Minnesota)

97.91¢ USD/lb carcass

72.45¢
 


Canada (Ontario)

1.90¢ CAD/kg carcass

67.89¢
 


Mexico (DF)

21.23 MXN/kg liveweight

71.68¢
 


Brazil (South Region)

1.86 BRL/kg liveweight

42.37¢
 


Russia

95 RUB/kg liveweight

$1.32
 


China

13.49 RMB/kg liveweight

96.32¢
 


Spain

1.38 EUR/kg liveweight

78.72¢
 

A searing heat wave accompanied by drought has dimmed what earlier were bright hopes for this season’s corn and soybean crops especially in the Eastern Corn Belt. Crop conditions have declined steadily over the past few weeks and are now record low for this point in the growing season.
 
USDA released their June acreage and quarterly stocks reports this week, which pegged 1 June corn stocks at 3.15 billion bushels and final acreage at 96.405 million, up 541,000 from the March Planting Intentions. Soybean acreage was revised up 2.178 million from March to 76.08 million acres, with 1 June soybean stocks at 667 million bushels. All eyes are on weather though, and rainfall over the next two weeks will be critically important to stem a further decline in corn yield prospects.
 
USDA’s June All Hogs and Pigs report showed 1 June hog inventories up 1 per cent from last year and in line with expectations. June-Nov farrowing intentions were 1 per cent below last year, and the recent advance in feed costs may further discourage expansion.
 
The quick deterioration in forward profit margins has highlighted the importance of setting targets to scale into protection as the opportunities to do so can be short-lived.
 
3rd Qtr ’12 Most Recent Offering of $2.87, the low was $(0.30), the high has been $14.07 and the 5 year percentile of 50.5 per cent.
 
4th Qtr ’12 Most Recent Offering of ($5.34), the low was ($7.37), the high has been $7.19 and the 5 year percentile of 32.9 per cent.
 
1st Qtr ’13 Most Recent Offering of ($2.18), the low was ($3.78), the high has been $6.04 and the 5 year percentile of 36.0 per cent.
 
2nd Qtr ’13 Most Recent Offering of $3.84, the low was $2.83, the high has been $9.83 and the 5 year percentile of 34.1 per cent.
 
The Hog Margin calculation assumes that 73 lbs of soybean meal and 4.87 bushels of corn are required to produce 100 lean hog lbs. Additional assumed costs include $40 per cwt for other feed and non-feed expenses. Thank you to Commodity & Ingredient Hedging, LLC (CIH) for the margin data. Please visit www.cihmarginwatch.com to subscribe to the CIH Margin Watch report.
 
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« Reply #511 on: July 29, 2012, 12:17:35 AM »


Weekly Roberts Market Report
27 July 2012



 Michael T. Roberts
 Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University


US - Corn exports were bearish at 19.6 mb vs. the 33.3 mb needed to meet USDA’s demand projection pace, writes Michael Roberts.

LEAN HOGS on the CME finished down on Monday. AUG’12LH futures finished $0.375/cwt lower at $93.325/cwt but $3.525/cwt lower than last Monday’s close. The DEC’12LH contract closed at $76.050/cwt; down $0.600/cwt. Losses swept the market on fears of record-high pork inventories. Heat was seen as stressing weight gains and viewed as supportive. However, slow processor demand offset support. The USDA cold storage report last Friday showed pork stocks still at record highs. Wholesale pork prices made small gains late last week.
 
CORN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The SEPT’12 contract closed at $8.140/bu; off 10.5¢/bu. The DEC’12 contract closed at $7.854/bu; down 10.25¢/bu. Profit taking and prospects for wet weather were supportive. Exports were bearish at 19.6 mb vs. the 33.3 mb needed to meet USDA’s demand projection pace.
 
SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The AUG’12 contract closed at $16.984/bu; off 59.0¢/bu. NOV’12 futures closed at $16.222/bu; down 64.0¢/bu. Non-commercial position building pressured sell-off activity. Rain forecasts also pressured prices. Exports were neutral-to-bullish. Futures look bearish with so many long positions in place given there are only six reporting weeks left in the marketing year.
 
WHEAT futures in Chicago (CBOT) closed down on Monday. SEPT’12 wheat futures finished at $9.126/bu; off 30.5¢/bu. The JULY’13 contract closed at $8.104/bu; down 9.0¢/bu. CBOT wheat futures cut losses Monday following the corn market’s test of the upside. Both commercial and non-commercial bull position accumulation has driven prices. The market remains fundamentally bullish long term.
 
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« Reply #512 on: August 03, 2012, 08:48:26 AM »


Weekly Roberts Market Report
01 August 2012



 Michael T. Roberts
 Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University


US - The US House of Representatives is scheduled to vote this week on extending the current 2008 farm bill by one year in order to reinstate emergency drought and other aid for farmers and ranchers. Sources confirm that included in the proposal will be help for producers to deal with losses from widespread drought for corn and soybean production and elevated livestock prices, writes Michael Roberts.

House Agriculture Committee Chairman Frank Lucas (R., Okla.) said Saturday that drought assistance measures would be revived in a one-year extension of the 2008 farm bill by cutting funding for subsidy programs. The 2008 farm bill is set to expire on September 30, 2012 there is some doubt whether or not there is enough support in the House to pass a new 2012 five-year farm bill. The Senate passed its version of the new 2012 farm bill on 21 June, but the House leadership has yet to schedule a vote on its own version. Mr Lucas said he is trying to get a House floor vote on the new 2012 farm bill his committee approved on July 12 that would reduce spending by $35 billion over 10 years by cutting agriculture subsidies, food-stamp spending and other programs. Both bodies of Congress must pass a version and then create a unified bill before it can be signed into law.
 
LEAN HOGS on the CME finished up on Monday with the exception of the nearby August contract. AUG’12LH futures finished $0.650/cwt lower at $94.65/cwt and $1.325/cwt lower than last Monday’s close. The DEC’12LH contract closed at $80.00/cwt; up $0.700/cwt and $3.950/cwt over last report. Seasonal trends and spillover from commodity markets were supportive. Pit sources said they expected the drought and rising feed costs to push producers to cut back on production tightening supplies of hogs into next year. Slightly higher sow culling was noted. Prices for breeding stock were under pressure at a number of local and regional markets last week and again on Monday. Quotes for sows ranged $1-$3/cwt lower. Some plant schedules have been trimmed due to hot worker conditions. Average slaughter weights were down 4 lbs/hd from a week ago to 271 lbs/hd. Average weights have declined due to hot weather over the last two weeks and are expected to erode further for another week or two. According to HedgersEdge.com, the average packer margin was raised $3.65/hd to a negative $3.65/head based on the average buy of $67.66/cwt vs. the breakeven of $66.40/cwt. Monday the CME lean hog index was estimated at 96.04; down 0.02 and 2.01 lower week before last.
 


CORN futures on the Chicago Board of Trade (CBOT) finished up on Monday. The SEPT’12 contract closed at $8.200/bu; up 21.5¢/bu and 6.0¢/bu higher than last Monday’s close. The DEC’12 contract closed at $8.140/bu; up 20.75¢/bu and 28.75¢/bu over last report and established a new life-of-contract high. Continued drought concerns on dry forecasts amid uncertainty about the ultimate size of the crop were supportive. The drought categories of extreme and exceptional, as noted on the graphs below expanded 7 per cent last week. This is the highest level of drought affected acreage since 2003 and the largest weekly increase in the extreme and exceptional categories since Drought monitoring began in the US in January 2000. See US Drought Monitor graphs:
 






Reduced demand for US high-priced corn limited prices somewhat. Livestock industry representatives have asked the government to temporarily halt the ethanol-production mandate that forces much of the crop into fuel. While demand rationing is taking place strengthening inverse in futures spreads show that end users don’t believe it is enough to offset the expected large drop in production. Exports were bearish with USDA putting corn-inspected-for-export at 21.438 mb vs. estimates for 22-24 mb. This is well below the 35.5 mb needed to stay on pace with USDA’s 1.b bb demand projection. Please see graph.
 


The national average basis for corn fell 1.0¢/bu to -10.0¢/bu compared to September futures. Basis in Central North Carolina was +50.0¢/bu and in Virginia -16.0¢/bu. Late Monday afternoon USDA put the US corn crop in good-to-excellent condition at 24 per cent vs. 26 per cent this time last week and 62 per cent this time last year.
 
SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The AUG’12 contract closed at $17.256/bu; up 41.5¢/bu and 27.25¢/bu over last report. NOV’12 futures closed at $434/bu; up 41.75¢/bu and 21.15¢/bu higher than a week ago. Weather and traders adding risk premiums ahead of the USDA crop progress report were supportive. Soybeans are entering a crucial pod-setting/filling stage over the next few weeks. The crop is about two-weeks ahead of the normal production cycle due to early planting and heat stress. When plants are under stress they speed up the life cycle to reproduce before it dies. The National Weather Service forecasts mostly dry weather this week for the important soybean-growing states of Iowa, Illinois, and Missouri. High temperatures are expected to reach the upper 90s in Iowa and Illinois and low 100s in Missouri. Demand remains strong as China continues to import US soybeans due to low production in South America. Additionally, domestic soybean-meal demand for animal feed remains strong. Late Monday USDA put the US soybean crop in good-to-excellent condition at 29 per cent vs. 31 per cent last week and 60 per cent this time last year. The national average basis for soybeans fell 3.0¢/bu to -36.0¢/bu compared to August futures. Basis in Central North Carolina was -83.75¢/bu and in Virginia -61.75¢/bu. Exports were bullish. USDA put soybeans-inspected-for-export at 15.498 mb vs. estimates for 12-15 mb. Inspections are 78 mb ahead of the demand curve projected by USDA’s 1.34 bb for 2012. Please see graph:
 


WHEAT futures in Chicago (CBOT) closed up on Monday. SEPT’12 wheat futures finished at $9.144/bu; up 16.5¢/bu and 1.75¢/bu over last report. The JULY’13 contract closed at $8.316/bu; up 1.5¢/bu and 21.25¢/bu higher than last Monday at this time. Spillover from corn and soybeans was supportive. Wheat prices are somewhat linked to these as wheat is also an animal feed. In addition, damage to wheat crops in other countries is becoming more apparent. Wheat crop damage from drought is surfacing from Australia and the Black Sea region. Too much rain is reportedly hurting wheat-crop prospects in Europe. Funds continue to be bullish on wheat as global supplies shrink. The national average basis for HRW wheat was down 1.0¢/bu to -55.0 compared to September futures. Late Monday USDA put the US wheat crop in good-to-excellent condition at 63 per cent vs. 60 per cent last week and 70 per cent this time last year. Exports are considered bearish as USDA put wheat-inspected-for-export at 18.601 mb vs. estimates for 19 - 21 mb. This is 5.199 mb short of the 23.8 mb needed to stay on pace with USDA’s 1.2 bb demand forecast.
 
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« Reply #513 on: August 11, 2012, 09:36:54 AM »


USA Hog Markets
09 August 2012

 

US - Margins continued to weaken over the second half of July as feed costs moved steadily higher while hog prices failed to keep pace, writes Doug Lenhart.
 
One exception to that trend though has been in far deferred periods of 2013, where traders may be anticipating a more significant herd reduction due to the likelihood that sharply higher feed costs will stick in the new crop year. Forward margins remain at or below the 10th percentile through Q1 2013, and only about average from a historical perspective beyond that.
 
Crop conditions have been declining all summer, and now both corn and soybean condition rating indices are below 1988 for this point in the season. Analysts expect USDA to make another significant cut to their yield and production forecasts in the August WASDE report, with corn below 130 bushels per acre and soybeans under 40. Rainfall may still help to preserve soybean yield potential, and the next two weeks are seen as critical with the crop now moving through its pod-setting stage of development.
 
The hog market has been weak as the pork cutout is running about $10/cwt. or nine per cent below year-ago levels. Hot summer weather may be impacting grilling demand more than normal this season, and this in turn has limited strength in cash hog prices. Moreover, near to medium-term liquidation as producers cull herds in response to soaring feed costs may likewise pressure the market through the fall.
 
Producers continue to focus on the second half of 2013 as a combination of higher hog prices with a potential correction in the corn and soymeal markets may present the opportunity to protect margins at or above the 70th percentile.
 
3rd Qtr ’12 Most Recent Offering of $(12.81), the low was $(13.76), the high has been $14.07 and the 5 year percentile of 5.7 per cent.
 
4th Qtr ’12 Most Recent Offering of ($17.90), the low was ($19.23), the high has been $7.19 and the 5 year percentile of 2.3 per cent.
 
1st Qtr ’13 Most Recent Offering of ($9.94), the low was ($10.89), the high has been $6.04 and the 5 year percentile of 10.4 per cent.
 
2nd Qtr ’13 Most Recent Offering of $4.77, the low was $(0.45), the high has been $9.83 and the 5 year percentile of 41.2 per cent.
 
The Hog Margin calculation assumes that 73 lbs of soybean meal and 4.87 bushels of corn are required to produce 100 lean hog lbs. Additional assumed costs include $40 per cwt for other feed and non-feed expenses. Thank you to Commodity & Ingredient Hedging, LLC (CIH) for the margin data. Please visit www.cihmarginwatch.com to subscribe to the CIH Margin Watch report.
 

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