Margin calls suck!
Big USDA report out Friday. The last report was bearish (limit down calls) but was discounted and the market keeps driving higher. The USDA numbers have been right on. Some analysts are already talking down USDA's pre-report estimates.
PED of course is the headliner. 2 articles yesterday in my local paper(getting old). I think what people miss is that expansion was already underway and will mute the PED losses.
Hang on to your hat!
Weights appear to have pretty well compensated for reduction in numbers so far.
I think it is time, at least for me, to better understand that the structural changes in the biz (I still refuse to call it an industry, but maybe I should) are pretty profound. Perfectly rational behavior on the part of producers- very positive margins for putting on some more pounds- and probably done a lot more uniformly than when you had tens of thousands of producers.
USDA report is bullish! They backed off of their previous farrowing intentions and profits look good for at least the next 9 months. Increased slaughter weights have made up for the decrease in hog numbers, which will continue, but fewer hog numbers is king.
Landscape in ag has been changing big time the last 20 years. Not for the best, in my opinion. From independent producers to factory workers. First chickens, now hogs, waiting for cattle, beans and corn.
Life is still good!
So, pounds of pork produced will almost be equal to last year, Lhq is at 1.30, 65% higher than last year on the same production pounds (people eat pounds not head), and the report is bullish. I hope it is limit up Monday so we can sell the failure. :-)