FEEDSTUFFS PRECISION PORK Market Report – July 24

In this week’s episode of Feedstuffs Precision Pork, Dave Bauer,
senior market analyst for Provimi, recaps some pork industry and
market highlights for the week and lists some of the things to
think about as we prepare for next week.

This has been a good week with hog market trends again finding
some solid traction, and that traction has provided a bit of a
tailwind, says Bauer. He believes the market has some momentum to
look forward to in the next week. 


In the markets this week, USDA’s weekly new pork sales were
reported at 31,800 metric tons, down 17% versus last week and
down 4% versus the four-week average. These sales fell short of
expectations. As based on the strength seen in hams over the past
several days, Bauer says expectations were not for this 17%
drop. 


Still, Bauer says not to worry. Think of it this way. This just
means that even though we didn't see the big ham sales for
export, we've obviously had some strong domestic demand to drive
hams higher. 


This could be one of the best weeks we've seen for price strength
in a long time, and what does this all translates into on the
topic of forward profitability? Bauer says when he plugs the
$2.25/cwt. CME index gains into the big flash model, this has
improved nearby profitability by $4.50 cents/head. Yes, this
still generates losses of $20 to $40 per head, depending on the
market are producers connected to, but in these challenging
times, reducing loss, this is a welcome site, he says.


Bauer notes that this improvement is a direct result of the
pickup in demand and is reflected in the bull spreads. As long as
this nearby demand driven strength continues, he believes we can
continue to improve the forward outlook. Still this isn't without
some very large challenges ahead. Even with those challenges,
Bauer remains optimistic about what’s ahead. Take a
listen. 

These are uncertain times and it will pay dividends to be
well-prepared. If you have questions on this week’s recap or want
to discuss something not covered, feel free to ASK DAVE
at David_Bauer@cargill.com. Plan today for
tomorrow’s success.


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