Wednesday, 5 August 2009

US Cash Hogs Midday: Weak To $2 Lower; Too Many Hogs Available

KANSAS CITY (Dow Jones)-- The Midwest direct hog markets at midweek are trading weak to as much as $2 per hundredweight lower, pressured by slaughter-ready supplies that are too large for packers to absorb at the current processing rates.

Analysts and livestock dealers said all plants appear to be full for this week and into the first half of next week. Some plants are said to be nearly full for all of next week. Larger supplies of contracted hogs, along with excellent growing conditions for the animals during July, have resulted in more animals available for slaughter.

"Weekly slaughter figures will have to move up to in excess of 2.1 million head on a consistent basis for packers to catch up with the supplies, but that will mean more downward pressure on prices," said a veteran livestock trader.

Livestock dealers and market managers said the arrival of warmer temperatures this weekend and into next week may slow daily weight gains some and allow producers to become more current on marketings. That could relieve some of the supply pressure but not for long, they said, because cooler nighttime temperatures normally arrive in the upper Midwest by the second half of August, so the hogs will eat more then and gain weight.

Opinions for prices Thursday are mostly lower.

Projections for Saturday's slaughter remain mostly from 70,000 to 75,000 head. The week's total is on pace to be around 2.075 million head.

The terminal markets are trading steady to lower with top prices ranging from $33 to $36 on a live basis.

-By Curt Thacker, Dow Jones Newswires; 913-322-5178; curt.thacker@dowjones.com

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(END) Dow Jones Newswires

August 05, 2009 13:09 ET (17:09 GMT)

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