Hogs & Pigs Report Bearish

Posted on 03/09/2017 10:20 AM

If you were "disappointed" the Grain Stocks Report didn't provide a shock to the market, all you had to do was wait for this afternoon's Hogs & Pigs Report. Even though futures were sharply lower to limit down on today's close, the report raises the risk of followthrough pressure on Monday. The market hog inventory signals marketings will run four percentage points larger than year-ago for the near-term. USDA reports hogs 180 lbs. and over (some of which have already been processed) and hogs 102-179 lbs. at 104% of year-ago -- coming in above expectations (in a market in which 1% really matters). Additionally, lighter-weight hogs came in 102% of year-ago, which signals marketings will remain "ramped up" into 2017.

Quarterly H&P Report
USDA
Avg. trade guess
Range
% of year-ago
 
All Hogs and Pigs
102
101.2
100.6-102.3
Kept for breeding
101
100.5
99.0-101.1
Kept for marketing
103
101.3
100.6-102.4
June-Aug. pig crop
102
99.8
99.0-101.3
June-Aug. pigs per litter
102
101.3
100.8-102.0
June-Aug. farrowings
100
98.8
97.9-99.8
Sept.-Nov. farrowing intentions
100
99.6
98.0-101.1
Dec.-Feb. farrowing intentions
100
100.1
98.0-101.3
Hogs under 50 lbs.
102
100.0
99.0-102.0
Hogs 50 to 119 lbs.
102
100.8
99.0-102.4
Hogs 120 to 179 lbs.
104
102.3
101.8-103.1
Hogs 180 and over
104
102.9
100.5-104.0


There wasn't a "friendly" number in the report, as all figures came in above traders' expectations. The only figures that came in equal to year-ago levels were the farrowing intentions figures -- but couple that with annual increases in the number of pigs per litter and even steady farrowings point to a bigger supply of market hogs. Farrowing intentions often change as traders adjust to market conditions and we suspect farrowing intentions may come down a bit in the current price environment.

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