After the close of trade on Wednesday, USDA released the monthly Cold Storage Report. Their survey of food warehouses found total pork stocks were still a record, which was not a surprise. We had been fearful it would give evidence to claims of poor exports. While total pork stocks did increase 21 million lbs this report normally sees stocks increase by 25 million lbs. That is neutral to lean hog futures. Belly stocks at 21.5 million lbs were about on our 20.6 million lb estimate. That makes for a 10 million lb drop from last month, which is more, then the normal 5 million lb drawdown. This is neutral to supportive for pork belly futures.
Given the size of the US dollar increase we find it interesting to note December lean hogs were only down 12 cents on Wednesday. That is not bad at all and indicates this market may like to get back to reality. Wholesale pork also closed up 59 cents. While we are not ready to go on a long term buying spree, perhaps this market would like to spend some time sideways for a few days.
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