Here is an abbreviated version of the weekly pork report. The full report will be back next week.
Below is how the weekly product market changed for the week ending 7/21.
*Product Price on Monday 7/17 Price as of Friday 7/21 Change
Loin 95.88 92.69 (3.19)
Butt 103.44 90.53 (12.91)
Picnic 66.27 65.65 (.62)
Rib 121.88 112.76 (9.12)
Ham 79.01 78.43 (.58)
Belly 208.47 215.20 6.73
Carcass Cutout 104.19 102.40 (1.79)
*National Carcass $86.69 $83.33 (3.36)
*National Live Price * not reported due $67.85 N/A
**Estimated USDA Hog Slaughter Week ending 7/21/17 2213
Actual USDA Hog Slaughter Same Period Last year 2141
% change year over year +3.4%
As you can see, the carcass value lost -1.79 cwt, while the live price lost over $3.00 cwt.
Live Hog Contract Friday Close Net Change
August Hogs 81.10 UNCH
October Hogs 67.23 (-.62)
December Hogs 61.98 (-.97)
Looking into next week:
- The product market was on the defensive all this past week; please see the data above. As was expected, this did not come as a surprise. The staff here has been expecting this for some time, and it did finally happen.
- Swine Times expects this to continue into next week. There is more weakness to the product going forward, particularly in the retail cuts. These could be under pressure for the next week to ten days.
- Hams could have more downside liability as the possibility that they could drop into the mid sixties price range (65 to 68) is not out of the question.
- The potential for the major wreck to the cutout is probably going to come from the pork bellies. They could potentially drop $30 cwt. in a week and this could be just the beginning.of Swine Times, that level is probably around 130 to 140 or $75 to $85 cwt. from where they are currently trading. This is key, so watch the belly price.
- Ultimately, the freezer will have to become the buyer for them. That will only happen when the packer/processor feels comfortable with the level to which the bellies go. In the opinion
How do we trade this?
- Sell October hogs on rallies, but be patient. Let the funds run the price of them up, and then scale in and sell them as they go higher.
- Trade the August hogs, buy them on breaks, and sell them on rallies. Don’t get attached to them, for the cash market can come down faster than you think.
- Look for packers to add kill, and then you can buy hogs for a trade.
- The cattle on feed report was bearish as expected, and this will not be constructive to deferred hogs. Pay attention to what the cattle are doing, as they can and do affect the hog futures.
*USDA National Hog and Pork summary
** Expressed in thousand head
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