Wednesday afternoon the USDA released the monthly Cold Storage report. The month end count of pork in storage totaled 579 million lbs. That amount itself is the largest end of June total on record. Wednesday's report, covering the month of June, found stocks only declined by 6 million lbs from last month. Normally the drawdown is 40 million lbs. This is actually the second problem month in a row. Last month's Cold Storage report, covering the month of May, saw a 28 million lb drawdown compared with a normal 50 million lb drawdown. With two months in a row of sharply reduced usage, likely due to exports, we call the lean hog futures to be 20 cents lower tomorrow night. Also included in this report is a breakdown of the various cuts. Pork bellies, which are sliced up to make bacon, were counted at 76 million lbs. That is the largest end of June total since 1999. From last month that was a decline of 2 million lbs. Normally the decline totals 11 million lbs. We would call this bearish to pork belly futures to the tune of 10 to 20 cents.
Contact Rich Nelson, Director of Research, with any questions.
800-262-7538
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