USDA Hogs & Pigs Report 03/27 14:10
By John A. Harrington
DTN Livestock Analyst
March 1 Hogs & Pigs Report by John A. Harrington
USDA Actual Average Guess Guess Range
All Hogs March 1 107.0% 107.0% 105.0-108.5%
Kept for Breeding 102.0% 103.5% 102.5-104.5%
Kept for Marketing 108.0% 107.0% 105.0-109.0%
180# Plus 109.0% 107.0% 104.5-108.0%
120-179# 106.0% 106.0% 103.0-108.5%
50-119# 107.0% 107.0% 104.0-109.0%
Under 50# 109.0% 109.0% 104.0-106.0%
Dec-Feb 102.0% 104.0% 103.0-104.0%
Mar-May* 102.0% 103.0% 102.0-104.0%
Jun-Aug* 98.0% 102.5% 108.0-112.0%
Winter Pig Crop 109.0% 109.5% 104.5-111.0%
Dec-Feb Pigs per Litter 107.0% 105.5% 101.5-104.0%
The quarterly hog inventory just released contains surprises on both sides
of the aisle. For starters, the breeding herd as of March 1 appears to
reflect smaller growth than expected. On the other hand, the market herd
inventory appears to be well anticipated, generally fitting with pre-
As far as farrowings are concerned, the winter farrow turned out to be
smaller than analysts were assuming. Yet, the total Dec-Feb pig crop
turned out to be fairly steady with trade expectations. Note that event
though the winter farrow was somewhat smaller than expected, pigs per
litter totaled more than the trade was looking for.
All inventory and pig crop estimates for March 2014 through December 2014
were reviewed using final pig crop, official slaughter, death loss, and
updated import and export data. An upward revision of 0.1% was made to the
December 2014 all hogs and pigs inventory. The net revision to the
September 2014 all hogs and pigs inventory was 0.9%. A net revision of
2.9% was made to the June-August 2014 pig crop.
Despite all these revisions, the USDA strangely decided to let the
estimate of the fall pig crop stand unchanged, at least for the moment.
The fall pig crop continues to total 29.37 million head, barely 4% above
the previous year. This seems odd given the enormous weekly kills seen
since March 1. Indeed, this week's kill totaled 2.27 million head, 11.8%
above last year. In short, the fall pig crop continues to look too small
in comparison with actual slaughter.
Based upon the smaller-than-expected breeding herd and somewhat smaller
winter pig crop, our guess is that deferred lean hog futures will open at
least 50 to 100 points higher when trade resumes on Monday.
For more from John, visit http://www.feelofthemarket.com/
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