This report should get a generally negative read from lean hog traders, but with lean hog futures still open there has been no selling pressure on futures. We expect a generally negative read to the report after many key categories came in above the average pre-report trade estimate and at the top end of guess ranges. But so far, the USDA survey findings are being ignored by the market.
Far-deferred futures could find some support from expectations of a 1% drop in March-May farrowings. However, with continuing efficiency gains in the farrowing house, more pigs per litter would likely hold the March-May pig crop at least steady with the year-ago tally.
Also limiting pressure on deferred futures should be the smaller-than-expected breeding herd. As expected, USDA sees a slight increase in the number of hogs coming to market through the first quarter of 2012. For the first half of January, slaughter should be steady to slightly above year-earlier levels and climbing to a 2% gain on year-ago by the end of the quarter.
Adding pressure across the board are some revisions to past inventories. June All Hogs & Pigs tallies were revised up about 1% from last quarter’s report and September inventories were revised up about 0.5%.
Quarterly H&P Report Expectations
| USDA
| Avg. trade guess
| Range
|
% of year-ago | |||
All Hogs and Pigs | 102
| 101.3
| 100.0-102.0
|
Kept for breeding | 100
| 100.8
| 100.4-101.0
|
Kept for marketing | 102
| 101.3
| 100.0-102.0
|
Sept-Nov pig crop | 102
| 101.6
| 101.0-102.0
|
Sept-Nov pigs per litter | 101
| 101.6
| 101.0-102.0
|
Sept-Nov farrowings | 100
| 99.9
| 99.5-100.2
|
Dec-Feb farrowing int. | 101
| 100.6
| 100.0-101.1
|
Mar-May farrowing int. | 99
| 100.8
| 100.5-101.3
|
Hogs under 60 lbs. | 102
| 101.8
| 101.3-102.0
|
Hogs 60 to 119 lbs. | 102
| 101.2
| 100.8-102.0
|
Hogs 120-179 | 102
| 101.0
| 100.1-102.0
|
Hogs 180 and over | 100
| 101.2
| 100.6-101.6
|
