CATTLEUSA DRIVE - Tuesday, December 24th

If you're still mad at the USDA, like I am, for their huge miss on 4th quarter inventories, I suggest skipping today's Hogs and Pigs report.

All Hogs and Pigs on December 1st

USDA's guess 100.5%

Average of estimates 100% with range from 99.4-100.3

Breeding Inventory USDA's guess 100.1%

Average of estimates 100.00 with range from 98.5-100.7

Market Hog Inventory USDA's guess 100.5%

Average of estimates 99.9% with range from 99.4-100.2

Sept-Nov Pig Crop

USDA's guess 101.8%

Average of estimates 100.5% with range from 100-101.0

Pigs per Litter Sept-Nov

USDA's guess 11.92 versus 11.66 last year Average of estimates 11.73 with range from 11.67 to 11.78

Much of this, once again, could be entirely inaccurate guesses by the USDA. Looking through the revisions paragraph, they made some small revisions to account for the misses, but not enough in my opinion. Also worth noting, you may be one that is suffering from the horrible PRRS outbreak that's been spreading like wildfire. Although those death losses are high, I don't see that accurately portrayed in this report. Therefore, we're going to need to see more revisions 3 months from now to reflect those issues you're facing.

Looking at the other categories, there was a slight revision of sows farrowing from Sept-Nov, but was nearly a no change category. Dec '24 through Feb '25, the USDA is expecting nearly no change in farrowing intentions. They are expecting a larger increase in March-May farrowing intentions, which is likely if we get PRRS under control.

As of Dec 1st, 2024-

Under 50# pigs USDA's guess at 101.2%

50-119# pigs USDA's guess at 101.4%

120-179# pigs USDA's guess at 99.4%

180# and over USDA's guess at 99.5%

With all that "data" hahaha, I guess we can call this a neutral report. Overall, I don't see anything in there to make the markets do something wild during thin holiday trade. I, instead, look for sideways trade in January. Without a major swing, I'd expect futures to trade product and cash. Since the last quarterly report, and this one, both showed fewer numbers available in the first quarter, if exports stay relatively steady and maybe strengthen, we should hold these levels. As for summer expectations, factoring in disease pressures, we're still going to need a ramp up in demand to get the cutout high enough to support >$100 futures. With that in mind, I'm inclined to set LRP or Put option floors under June and July inventory. For now I still want a little top side potential, but will likely sell calls if we get another leg higher. No Hog LRP available tonight though.

Cold Storage was once again a snoozefest. Stocks of all meats were down compared to last year, but some showed gains compared to last month. All in all, nothing worth really reporting or getting nervous about. Go enjoy your families.

-Fat cattle kill at 118,000 vs 118,000 a week ago and 55 a year ago

-Choice boxes up .13 to $315.98 and select up .84 to $286.75 for a spread of 29.23 on 114 loads
-CME feeder index for 12.20 came in at $263 -LRP’s ending last week settled at $194.99

-Hog kill at 490,000 vs 487,000 a week ago and 1,017 a year ago.

-Afternoon Pork reported down 2.66 at $94.62 on 301.50 loads

-CME lean hog index on 12.19 reported at 84.35

-CME pork cutout index on 12.20 reported at 95.84 -LRP’s ending 12.23 settled at approximately $84.71