A record amount of pork piled up in August due in part to a slowdown in exports, but with prices low, U.S. consumers bought enough pork to prevent a much larger buildup, according to a Reuters report.
The latest cold storage report was generally more positive than market expectations, say CME Daily Livestock Report authors Steve Meyer and Len Steiner. Total pork supplies in cold storage at the end of August were estimated to be 517.9 million pounds, 3% higher than a year ago and some 19.2 percent higher than the five year average. While this is still a very large amount of pork in cold storage, it is lower than pre-report estimates.
"By our demand models they (consumers) have actually been asking for pork so we haven't seen that switch out of pork back into beef yet," said Rich Nelson, analyst with Allendale Inc.
"U.S. consumer demand, for all the tonnage we're shoving on them, is not doing too bad," he said.
Pork stocks fell about 22 million pounds in August from July, much steeper than the typical monthly decline of 4 million pounds, analysts said.
Chicago livestock traders will look to Friday's USDA quarterly hogs and pigs report, which usually has more impact on the hog futures markets.
"You have record pork in storage and less than you thought - so does it have any real effect on the market - probably very little," said Jim Clarkson, livestock analyst with A&A Trading Inc.
There had been worries that slow pork exports would have resulted in even larger warehouse supplies. Pork exports have slowed due to the global recession, H1N1 flu, and importing countries building up their own hog and pork supplies.
Source: Reuters, CME Daily Livestock Report