USDA lowered their forecast of 2014 pork production a tiny bit and lowered their forecast of annual average hog price by $2.50 to $77-78/cwt of live weight. They also lowered their live hog price forecast for next year to $67-73/cwt.

July pork exports were down 2.5 per cent and pork imports were up 2.4 per cent compared to a year ago. During July, the US exported 22.0 per cent of pork production. Imports equaled 4.4 per cent of production. Live hog imports were up 1.7 per cent during July.

Through the first seven months of the year, US pork exports are up 6.0 per cent compared to January-July 2013. That is remarkable given the record prices this year. The big growth market for pork exports is Mexico which accounts for 70 per cent of the increase. Pork imports are up 7.5 per cent. Imports of live hogs from Canada were down 6.8 per cent during the first seven months of the year.

Domestic pork demand was up 4.0 per cent in July. That was the 19th consecutive month with pork demand above the year-ago level.

After seven weeks of decline, hog prices are higher for the second week in a row. The national average negotiated carcass price for direct delivered hogs on the morning report today, $100.75/cwt, is up $5.53 from last week and up $10.29 compared to a year ago. The eastern corn belt average price this morning was $96.38/cwt. The western corn belt averaged $103.27/cwt and Iowa-Minnesota's morning average hog price was $103.29/cwt. Peoria had a top live price today of $66/cwt. There was no interior Missouri price quote this morning.

The pork cutout value was higher again this week. This morning's cutout was $106.55/cwt FOB the plants, up $3.73 from last Friday and $8.58 above a year ago. This morning's hog carcass price was 94.6% of the cutout value, which could put pressure on Monday's bids.

This week's hog slaughter totalled 2.053 million head, up 15.3 per cent from the week before due to last week's Labour Day holiday, but down 5.4 per cent from the same week last year. Hog slaughter has been below the year ago level for the last 29 weeks. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.1 pounds, up 1.5 pounds from the week before and 11.4 pounds heavier than the same week last year. This was the 17th consecutive week with weights at least 10 pounds heavier than a year ago.

Hog futures were steady to higher this week. The October hog futures contract ended the week at $105.70/cwt, up 8 cents from the previous Friday. December hogs gained 85 cents this week to close at $96.30/cwt. The February lean hog contract settled at $93.55/cwt, a gain of $2.13.