Last month Congress passed and the President signed the free trade agreement with South Korea. It now appears the agreement may have difficulty passing South Korea's National Assembly. It is especially unpopular with Korean farmers who fear large increases in the importation of U.S. farm products. South Korea's President is working to get approval this month, but opposition groups are calling for a delay until after their April elections.

Japan is moving to increase from 20 months or younger to 30 months or younger the allowable slaughter age of U.S. and Canadian cattle that can supply beef to Japan. The 20 month restriction was put in place following the BSE scare. The new 30 month rule is expected to go into effect sometime during the first half of 2012. Thus far in 2011, Japan is the third largest foreign buyer of U.S. beef. Prior to 2004, they were our largest foreign market.

Financial markets rallied last week and crashed early this week with the EU plan to resolve the Greek financial crisis. The financial problems associated with sovereign debt are likely to continue to be major market movers.

The pork cutout was lower every day this week. USDA's Thursday afternoon calculated cutout value was $93.53/cwt, down $3.49 from the previous Thursday. Loins, butts, hams and bellies were all lower. Seasonally, this is not unexpected.

Hog prices also dropped this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $86.08/cwt, down $1.27 from last Friday. The Friday morning price report for the western corn belt and for Iowa-Minnesota were both at $87.51/cwt. Eastern corn belt hogs averaged $85.31 this morning. Friday's top live hog price at Peoria was $60/cwt. Zumbrota's top was $61/cwt. The top for interior Missouri live hogs was $62.25/cwt, down $2.25 from the previous Friday.

Hog slaughter totaled 2.347 million head this week, up 1.8% from the week before and up 0.2% compared to the same week last year. This follows two consecutive weeks with hog slaughter below year-ago. Hog slaughter since the start of September totals very close to the level indicated by the September inventory survey.

Barrow and gilt carcass weights for the week ending October 22 averaged 203 pounds, up 1 pound from the week before and down 1 pound from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 273.5 pounds, up 0.2 pounds from the week before, but down 2.5 pounds compared to last year.

Today's close for the December lean hog futures contract, $86.85/cwt, was up 18 cents from last Friday. The February lean hog futures contract settled at $90.10/cwt, up 20 cents from the previous Friday. April gained 90 cents this week to settle at $92.25/cwt.

Last month Congress passed and the President signed the free trade agreement with South Korea. It now appears the agreement may have difficulty passing South Korea's National Assembly. It is especially unpopular with Korean farmers who fear large increases in the importation of U.S. farm products.