This week’s F.I. Hog slaughter rate is seen to be at the Industry Capacity; we generally view Industry’s weekly Capacity to be around 2.4 million head. Friday’s Wholesale Pork market posting showed softer Wholesale Composite Pork Carcass prices at $73.14, off -$1.25 from the previous day; however, Direct National Spot Hog prices were quoted higher, at $50.92, up $1.29 per cwt.
Next week should determine if the firming Spot Direct Hog prices are the better indicator for the market direction or is the softer Wholesale Pork prices? However, often Spot Hog markets can be seen as a leading indicator whereas, Wholesale Pork pricing a lagging indicator of market attitude. My Fundamental Market attitude still sees ample Red Meat supplies available with price pressure for Wholesale Pork and Beef markets as Packers discount to clear their Cooler Inventories.
- This week’s F.I. Hog slaughter rate is at the Industry Capacity; we generally view Industry’s weekly Capacity to be around 2.4 million heads. Seasonally, the trade can often have greater Weekly Hog slaughter rates during early December than seen during late November.
- Weekly Hog Carcass weights gained +1# relative to last week at 213# but are below year earlier weights. Seasonally, Hog Carcass weights have a tendency to increase some more in coming weeks.
Mid-week, Wholesale Pork Markets values continued selling off but current values are still well above the spring lows.
Mid-week the AMS/USDA Wholesale Composite Pork Carcass prices continued selling off going to $72.19 per cwt. compared with the previous week at $74.85 vs. a year ago at $92.64.
Mid-week, Wholesale Fresh Pork Loin prices sagged showing more seasonal weakness going to very depressed levels, Fresh Pork cut demand ahead of Thanksgiving tends to be lackluster and it is too soon to start the New Years rally:
Mid-week, Wholesale Primal Pork Butts prices were under less downside pressure than seen for Pork Loins, in fact Pork Butts are now trading at a premium to Pork Loins. Mid-week Wholesale Primal Pork Butts prices were reported at $72.87 per cwt. compared with the previous week at $72.21 and a year earlier at $111.64.
Wholesale Primal Picnic prices firmed this week, continuing to be above the longer term average. Mid-week Wholesale Picnic values gained going to $50.94 per cwt. compared with a week earlier reported at $48.58 per cwt. compared with a year ago at $78.40.
Mid-Week Wholesale Rib prices eroded which is Counter-Seasonal.
Wednesday’s Composite Wholesale Pork Loin Primal values eroded going to $72.27 compared with a week earlier at $75.82 and a year ago reported at $93.10. Retail Grocery stores are featuring Turkey and Hams for the Thanksgiving Holiday. We are impressed how cheap Turkeys are being featured by Retailers for the holiday despite Bird Flu killing millions of turkeys the spring and summer.
Wholesale Pork Rib prices are having a “counter-seasonal” decline; Wednesday’s Wholesale Rib prices were posted at $138.75 per cwt compared with the prior week at $141.58 vs. a year earlier being posted at $155.31. Wow- Friday’s Wholesale Pork Rib prices were finally reported to be $137.42
Briefly this week, Wholesale Primal Pork Belly prices broke below $100.00 but firmed later week. Wholesale Pork Bellies are the only Pork Primal cut trading at premiums to a year ago levels:
Mid-week Wholesale Ham prices continued to be quite depressed and trading below the Longer Term average values. Wednesday’s Wholesale Primal Ham price was reported at $59.84 per cwt. compared with $60.72 the previous week vs. a year earlier at $92.04.
Producer hedgers seemed to be in tune with the PriceCount major support indicated on the chart below as short covering was very evident on limit down action early this week which ended up being the low for both December and February contracts. But producers are suggesting that profitability is minimal in summer months, depending on lots of things, but somewhere between $10 and $15 dollars per head.
Locking in profits where competing meat seems in significant supply and in a long trending bear mode is starting to be the rhetoric around the marketplace. Technical analysts seem to also be in concert that major overhead will curtail bullish enthusiasm and at least test this past weeks’ lows. We will see. One thing is for sure, the stats say we have plenty of meat supplies in store and coming at us.
Wednesday’s Wholesale Primal Ham price was reported at $59.84 per cwt. compared with $60.72 the previous week vs. a year earlier at $92.04.
Wholesale Primal Pork Belly prices sold off sharply this week as apparently “excess Pork Bellies are above fresh slicing demand” and are now being priced into freezer stocks. Prices broke below $100.00 but firmed later in the week. Wholesale Pork Bellies are the only Pork Primal cut trading at premiums to a year ago levels.
Mid-week Wholesale Pork Belly prices were reported at $104.43 compared with the previous week at $115.99 and a year ago at $92.11. The USDA’s Cold Storage Stocks report will be released early next week. Friday’s session posted Wholesale Pork Belly Primal prices at $111.23 per cwt.
By John Ginzel
The following commentary does not necessarily reflect the views QT Info Systems
The opinions expressed below are the author’s own.