The product market has turned and the live hog prices are following them.
Below is how the weekly product market changed for the week ending 7/28.
*Product Price Monday 7/31 Price Friday 8/4 Net Change
|* National Carcass Base Price||$79.40||79.82||.42|
|* National Live Price||$63.01||62.94||(.07)|
**Estimated USDA Hog Slaughter Week ending 8/5/17 2250
Actual USDA Hog Slaughter Same Period Last year 2200
% change year over year +2.2%
As you can see, the carcass value lost 3.89 cwt. while the live price lost .07 cwt.
Live Hog Contract Monday 7/31 Friday 8/4 WTD Net change
August hogs 80.30 83.23 2.93
October Hogs 66.03 66.78 .75
December Hogs 60.50 61.45 .95
February Hogs 65.60 65.90 .30
Looking into next week:
- The product market was under pressure as you can see by the 3.89 cwt. loss on the carcass cutout for the week. As of this writing, there isn’t any let up as we look into next week.
- Swine Times has been cautioning the readers to pay particular attention to the bellies.
- The correction in price we have been looking for has finally started to happen, as evidenced by the $9.91 cwt. decrease in price this past week. What we need to be watching for now is the price to which they fall, week to week. They will be a very dominant factor to the pork carcass cutout for the next several weeks.
- Hams will also be under pressure, but not to the degree the bellies are. Swine Times looks for hams to drop 7 to 10 more dollars cwt.
- The retail cuts are still going to go some lower and packers will be looking to use the lower prices to capture export orders. Keep an eye out for export talk particularly to Korea and Japan.
- There will be even more pressure put on the product market when the packers start to add Saturday slaughters to their schedules. This is just around the corner.
How do we trade this?
- Continue to sell October hogs on rallies over 67.00, if they get there. There is still the potential for October hogs to go under $60.
- As we move closer to Labor Day, be prepared to start looking for a place to cover October hogs and get long. If the October futures go under $60.00, Swine Times recommends covering the shorts.
- Watch the cattle and broiler prices as they are going to add more competition to an already
- weak pork market.
*USDA National Hog and Pork summary
** Expressed in thousand head
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