The big news is the continuing hot, dry weather and the continuing rise in feed prices, say Ron Plain and Scott Brown, University of Missouri agricultural economists. Corn and soybean prices reached record levels last week with corn at times above $8 per bushel, soybeans above $17 per bushel and soybean meal above $550/ton.

The drought now covers a larger share of the 48 states than any time since 1956. USDA estimates only 31% of the corn crop was in good or excellent condition on July 15. That compares to 40% good or excellent the week before and 66% a year ago. The Crop Progress report says 34% of the soybean crop was rated good or excellent on July 15 compared to 40% a week earlier and 64% a year ago.

The September corn futures contract ended last week at $8.245/bu, up 84 cents from the week before and up $3.15 from five weeks earlier. December corn ended the week at $7.9575/bu. August soybean meal ended the week at $17.575/ton, up $1.16 from the previous Friday.

Retail pork prices in June declined for the fourth consecutive month. This reflects poorly on demand since retail pork prices typically increase each month from January to August. The average price of pork in grocery stores during June was $3.397 per pound, down 1.1 cent from May and down 8.4 cents from June 2011. June was not a good month for hog packers. The farm-wholesale price spread was the tightest since June 2009.

The live weight price for 51-52% lean hogs for June averaged $67.87/cwt, up $9.36 from May, but down $2.01 from June 2011.

USDA's Thursday afternoon calculated pork cutout value was $91.20/cwt, up $1.69 from the previous Thursday, but $8.53 lower than this week last year. Loins, butts and hams were higher this week. Pork bellies were lower.

Hog prices declined again last week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $87.37/cwt, down $1.09 from the previous Friday. The eastern corn belt averaged $86.56/cwt Friday morning. The western corn belt averaged $92.15/cwt. Iowa-Minnesota averaged $92.24/cwt on the morning report. The east-west price spread remains quite large. Peoria had a top live price of $57 and Zumbrota had a live top of $60/cwt. The top for interior Missouri live hogs Friday was $61/cwt, down $6.50 from the previous Friday. The average hog carcass price is 95.8% of the cutout value.

Hog slaughter last week totaled 1.961 million head, up 0.1% from the week before, but down 1.5% compared to the same week last year. The average barrow and gilt live weight in Iowa-Minnesota last week was 268.50 pounds, down 0.5 pound from a week earlier, up 1.9 pounds from a year ago, and above year-earlier for the 34th consecutive week.

Friday's close for the August lean hog futures contract was $93.70/cwt, up $3.30 from the previous Friday. October hogs settled at $79.80/cwt, up 33 cents for the week. December hogs ended the week at $76.65/cwt.