The Sep. 1 Quarterly Hogs and Pigs report from the USDA’s National Agricultural Statistics Service Friday may be interpreted bullishly by futures traders on Monday since it indicated lower supplies than pre-report estimates.
The report had all hogs and pigs on Sep. 1 down 3.082 million head, or 3.93%, to 75.352 million from 78.434 million a year ago, the lowest in three years, the Livestock Marketing Information Center in Denver said. Average pre-report estimates showed traders and analysts were expecting all hogs and pigs to be down 1.7% at about 77.101 million head with the actual statistic well below the lowest estimate.
BREEDING HERD DOWN
The breeding herd was expected to drop 70,000 head, or 1.11%, to 6.263 million head from 6.333 million last year, but the reported breeding herd fell 143,000, or 2.3%, to 6.190 million from 6.333 million and outside of the range of pre-report estimates.
Market hogs decreased 2.939 million head, or 4.08%, to 69.162 million from 72.101 million, a larger decrease than forecasts, which were down 1.8% to 70.8 million.
Pre-report estimates had all market hog categories being down 1.7% to 2.0% on average. Actual statistics showed that the lightweight categories of under 50 pounds and 50-119 pounds fell 5.6% and 6.0%, respectively, to 21.855 and 19.751 million head, which was much lower than pre-report estimates.
The heavy weight categories (120 to 179 pounds and 180 pounds and over) dropped 1.4% and 1.3%, respectively, to 14.656 and 12.899 million head. This was near pre-report estimates, of declines of 1.9% and 2.0%.
Declines across the market hog categories point toward tighter available supplies in the near term, the LMIC said.
FARROWINGS ALSO DOWN
June-to-August farrowings were 3.046 million head, down 6.6% and a much greater decline than estimates, which were forecasting a decrease of 2.6% to 4.4% with an average of down 3.7%.
A slight increase of 0.4% in pigs per litter to 11.10 was expected, which was near the actual pigs per litter of 11.13 (up 0.6%). Lower farrowings were partially offset by the higher pigs per litter, which led to the June-to-August pig crop of 33.900 million head, down 6.0% from last year.
Industry expectations had the pig crop down 3.4% with a range of 2.1% to 3.9% lower.
Farrowing intentions for the September to November and December to February periods were expected to be down 1.4% and 0.1%, respectively, to 3.098 and 3.038 million head. Reported September to November farrowing intentions were 3.000 million, down 4.5% while December to February farrowing intentions were up 1.4% to 2.962 million head.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $123.98 to $126.80 per cwt, compared with the previous week’s range of $122.43 to $127.40. FOB dressed steers and heifers went for $194.02 to $198.29 per cwt, versus $192.44 to $203.38.
The USDA choice cutout Friday was down $2.28 per cwt at $303.32, while select was off $0.46 at $274.53. The choice/select spread narrowed to $28.79 from $30.61 with 61 loads of fabricated product and 43 loads of trimmings and grinds sold into the spot market.
The USDA reported Friday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.65 to $1.85 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.26 3/4 a bushel, down $0.02 1/2.
The CME Feeder Cattle Index for the seven days ended Thursday was $154.04 per cwt down $0.45. This compares with Friday’s Sep contract settlement of $154.62 per cwt, down $0.27 and the Oct settlement of $157.35, up $0.50.