While the weekly USDA pork cutout value last week was up from the previous week, the same week last year and the 2015-2019 average, it may be turning lower this week, right on schedule.
The data came from the USDA’s Agricultural Marketing Service. It was compiled into graphs and published by the Livestock Marketing Information Center in Denver.
PORK CUTOUT MAY WEAKEN
The pork cutout value for last week was listed at an average of $82.60 per cwt, up $2.99, or 3.76%, from $79.61 a week earlier. Last week’s pork cutout also was up $4.55, or 5.83%, from $78.05 per cwt in the same week a year ago and up $4.60, or 5.90%, from the previous five-year average of $78.00.
What is telling is the graph’s comparisons to last year and the 2015-2019 average. The graph shows the pork cutout last year with a peak last week followed by a sharp downturn this week. The graph also shows that the five-year average of weekly pork cutouts tends to make a slow turn lower last week followed by a more accelerated decline this week.
The average weekly cutout line shows a slow decline in cutout values through the first week of March. At that point, the cutout waffles its way toward a slow recovery into the second week of April.
The daily pork cutouts from the USDA, point to a slightly lower five-day running average and prices declining daily. This makes it seem as though the week’s average will be lower when all the numbers are in and tallied.
BUTCHER HOG PRICES MOVING HIGHER
History shows that slaughter hog prices will rise through this week before beginning a seasonal decline. USDA-AMS data show that the average price peak at this time of year will occur in the first week of February. Over the 2015-2019 period, the average high this week has been $65.89 per cwt.
Weekly prices this week were higher than last year and the previous five-year average through January, ending last week at $67.73 per cwt. This was up $1.64, or 2.48%, from $66.09 per cwt the previous week, up $4.25, or 6.70%, from $63.48 the same week a year ago and up $2.07, or 3.15%, from the five-year average of $65.66.
If the trend of the 2015-2019 average holds, the weekly average price for slaughter hogs will hold within a narrow range and bottom the third week of March. At that point, prices will turn higher into the summer as the grilling season heats up.
The annual weekly high price, then, will come in the second week of July.
One of the things driving hog prices is the drop credit, which began rising in July and has hardly looked back.
CATTLE, BEEF RECAP
Fed cattle trading was reported last week at $110 to mostly $113 per cwt, up $1 to $2 from the previous week. Dressed-basis trading was seen at $177 to $178 per cwt, up $5.
The USDA choice cutout Wednesday was down $1.48 per cwt at $235.28, while select was off $1.65 at $223.39. The choice/select spread widened to $11.89 from $11.72 with 114 loads of fabricated product and 39 loads of trimmings and grinds sold into the spot market.
The USDA reported Wednesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.00 to $1.25 a bushel over the Mar CBOT futures contract, which settled at $5.52 a bushel, up $0.09.
The CME Feeder Cattle Index for the seven days ended Tuesday was $136.44 per cwt, up $0.04. This compares with Wednesday’s Mar contract settlement of $138.52 per cwt, down $0.60.