USDA pig report to show further oversupply
By Joanna Levin
PIG futures prices inched lower during the past week of trading, depressed in part by higher grain costs. Many traders are cautiously selling off ahead of this Fridays quarterly pig inventory report from the US Department of Agriculture.
The Chicago August lean hog contract closed yesterday (22 June) at 58.87¢/lb, down about 12¢ from both the previous Friday and a week ago.
Pig producers have suffered substantial losses so far this year and this Fridays report is expected to show worsening oversupply. Many analysts are forecasting a 1-2% growth in the summer breeding herd and a rise in the number of market hogs of up to 6%.
On the bullish side, some traders argue that hot weather forecasts for the Midwest could result in fewer sales of live pigs and oblige the packers to raise their bids. So far, cash prices are little changed at 43.00-43.50¢/lb, compared with 42.50-43.50¢/lb two weeks ago.