Agribusiness Weekly Update: More piggies going to market

Beef
U.S. beef packer margins last week averaged a loss of about $35 per head, according to Hedgers Edge. The Sept. 1 feedlot inventory was 10.637 million head, down less than 1% from last year but still 4.5% above the same period in 2010. So far in 2012, imports of feeder cattle are up about 287,344 head, a 35% increase and nearly all due to increased imports from Mexico. At this pace, Mexico could contribute an additional 220,000 head by the end of the year, according to Derrell, Oklahoma State University Extension Livestock Marketing Specialist.

Hogs & Pork
Fresh pork processing margins were $8 per head last week, according to Hedgers Edge. U.S. hog farmers are slaughtering animals at the fastest pace since 2009 as a surge in feed costs spurs the biggest losses in 14 years. Analysts say that will mean smaller herds next year and a likely rebound in pork prices. The 73.3 million hogs processed in eight months through August were the most in three years, according to the USDA.

Chicken
Chicken processors are seeing very tight margins as corn and soybean meal prices remain high. August (Ready-to-cook weight) for broilers totaled 3.91 billion pounds, a slight increase from the amount certified in August 2011, according to USDA. Total live weight production in August was 5.18 billion pounds, roughly flat with a year ago. Commercial hatcheries set 189 million eggs in incubators during the week ending Sept. 22, up 1% from the eggs set the corresponding week a year ago — cumulative broiler production is down about 2% from last year, according to USDA.

Table Eggs
Large egg prices ranged from $1.36 to $1.49 last week, up 8 cents from last year. Table egg inventory rose 3% from a year ago with 1.061 million (30 dozen cases) processed, according to the USDA report from Sept. 24.

Grains
Cash corn prices traded Wednesday (Sept. 26) at $7.47 per bushel, rising 17.82% from a year ago. The December corn futures closed at $7.43 per bushel, corn for March delivery traded at $7.47, according to the Arkansas Farm Bureau. Corn futures ended the day mixed, with nearby contracts under pressure as the early harvest rolls on. The trade expects Sept. 1 corn stocks to come in near 1.15 billion bushels, up from a year ago but down from the 1.13 billion in the recent supply/demand report, according to Arkansas Farm Bureau analyst. 
       
Cash soybean prices closed Wednesday (Sept. 26) at $16.01 per bushel, up from $12.32 from a year ago. The November contract traded at $16.11, up 1 cent while January beans closed at $16.14, up 3 cents. Traders may be inclined to wait for the stocks report to be released later this week, even though the changes in the monthly supply/demand report likely telegraph what that report will say. Traders are expecting Sept. 1 stocks to come in at 130 million bushels. The November contract has support at $15.93 in the near-term, according to Arkansas Farm Bureau analyst.
     
Dairy
U.S.Class IV milk prices averaged $16.35 per hundredweight in August, down from $19.04 a year ago, further stressing dairy farms across the country. Wholesale dairy product prices have also declined from a year ago. Cheddar cheese dropped to $1.65 per pound, from $1.82 last year.

Ethanol
Cash ethanol prices traded at a $2.39 per gallon last week, down from $2.72 per gallon a year ago, according to USDA. Ethanol was priced at a $1.26 per gallon discount to gasoline as of Sept. 25.