In this file:


         Weak Exports Kill Hog Prices

         In lean hogs, tighter supply doesn't translate to higher prices



Weak Exports Kill Hog Prices

Snow events hurt hog procurement, this week.


By Rich Nelson, Allendale Inc.

via Successful Farming/ - 2/9/2018


USDA estimated the week's hog procurement at 2.389 million head. That includes a 435,000 and 96,000 head run for today and tomorrow.


This is relatively close to our 2.398 estimate which is not bad for a snow day. This week's run would total 1.2% over last year. The past four weeks have run 1.7% of last year.


There was a little shortfall in this week's run, due to weather. That is a part of this week's sharp 4.65 price break on the April, but likely not the major driver.


In this same discussion is the weight issue. Thursday's weight report, covering the week ending January 27, showed barrow and gilt weights 0.5% over last year. That covered nationwide numbers. Wednesday's Iowa/Minnesota report for the week ended February 3, showed a 1.3% increase. Either way, we are not back to current.


A big driver for this drop in pricing is the export situation. Yesterday's weekly pork export sales report was just plain bad at 7% under last year. This continues the poor pace noted for five weeks in a row now.


Year to date sales are 1% under last year at this time. Look at what happened the week after 2018 rolled over on the CME futures charts, lower trade began. USDA sees whole-year exports at 5% over last year. Our number, from the AgLeaders Conference, is 4% over.


Though USDA's changes on the pork balance sheet were slightly supportive yesterday, USDA is still using production estimates that are just too large...





In lean hogs, tighter supply doesn't translate to higher prices


By Rich Nelson, Allendale, Inc.

via Futures Magazine - February 7, 2018


Lean Hogs


On a seasonal basis, we have generally tighter supplies from the start of the year into April. After late April, supply takes a more dramatic decline into the year's lows in the summer. That does not mean price goes straight up in this period. Spring is a period where a little shake-up is normally seen. Traders are aware of a slight slump in prices from the minor February or March peak into spring.


Based on recent price action, we can see a clear reason fora price drop. Friday's 73.02 price for the Iowa/Minnesota is the highest since August 18. These prices are 6% over last year. Cash pork is off its recent price high from Jan. 23. Compared with last year, it is 2% lower.


Seasonally there is a small slump in prices from the start of February to mid-month. This is often a good point to work on short-term buys for a move into March. One thing the trade is quietly concerned about is another spring like 2017.


For the 2018 picture, Allendale expects a 3.0% year/year increase in offered supply of pork (26.433 billion lbs.). After exports and other factors, the U.S. consumer will see a 1.7% increase in the amount of pork offered to them on a per-capita basis (66.1 lbs.). We expect the year to average $72 per lean cwt. That is just over the $70 price from last year. Due to cheap feed, US producers can lock in a $27 per head profit for hogs in 2018 assuming both feed and hog prices are locked in right now.


At a minimum, we would lock in feed prices now (feed grains, not soymeal). For speculative trading, we are simply playing a range. RN


Live Cattle


The Dow Jones Industrial Average, the general measure of the U.S. stock market that the public follows, was down as much as 1,597.08 points after 2pm Central on Monday. It rebounded after that point...


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