Grimes and Plain Weekly Hog Outlook

CHICAGO - May 9/08 - SNS -- Following is a week ending hog market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

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Personal contact with people in the pork marketing sector continue to

support the belief that containers are slowing the shipment of pork

into the export market.

Also supporting the shortage of containers is the cold storage stocks

that set a record high at the end of February. They broke that record

at the end of March.

The product market price has gone almost straight up in the past

month, which usually does not happen with cold storage stocks that are

not already committed.

Even though the consumer demand for pork domestically in last couple

of months with available data shows weakness, late April and May

prices for hogs and pork products suggest the probability that

domestic consumer demand may be stronger than indicated. These

stronger prices, which now are above year’s earlier level with

slaughter, for the past four weeks have been up between twelve and

thirteen percent. Regardless, we have an unbelievable strong demand

whether or not it is only export demand growth or a combination of

export and domestic demand growth.

Pork product prices pushed higher again this week even with large

slaughter. The cutout per cwt of carcass on Thursday afternoon was at

$78.71 per cwt up $4.33 per cwt from a week earlier. Loins were at

$107.83 per cwt up $3.16 per cwt, Boston butts were at $84.35 per cwt

up $6.39 per cwt, hams were at $59.78 per cwt up $5.58 per cwt and

bellies were at $90.98 per cwt up $6.00 per cwt from seven days

earlier.

The percent of the corn crop planted in the U.S. as of May 4 was 27;

this compares with 45 percent last year and 59 percent for 2003-2007.

With the big decline in corn acreage, indicated by the March 3rd

planting intention, we need at least normal yields or the pain of high

corn prices will be even more severe. If now looks like we will need

to get corn prices high enough to close some ethanol plants for some

period. With the current prices for gasoline, that would probably be

between $7-8 per bushel.

Cash hog prices Friday Morning were $2-5 per cwt higher compared to a

week earlier. The weighted average negotiated carcass price were up

$5.47-7.02 per cwt compared to seven days earlier.

The price for live hogs at select markets were: Peoria $50 per cwt,

Zumbrota, Minnesota, $56 per cwt and interior Missouri $55.

The weighted average carcass price Friday morning for negotiated hogs

by area were: western Cornbelt $78.02 per cwt, eastern Cornbelt $76.77

per cwt, Iowa-Minnesota $78.10 per cwt and nation $77.06 per cwt.

Slaughter this week under Federal Inspection was still up 7.7 percent

from a year earlier at 2089 thousand head but the smallest full week

slaughter since September of last year.

The average weights of barrow and gilts in Iowa-Minnesota were at

263.7 pounds for last week; down 0.9 pound from a week earlier and

down four pounds from a year earlier. This data supports the

probability that some of the large slaughter the last few weeks is due

to pulling markets forward.

Feeder pig prices at United Tel-O-Auction this week were steady to $6

per cwt above two weeks ago. The prices at United by weight groups

were: 50-60 pounds $70.50-74.50 and 60-70 pounds $61.00 per cwt.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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