The USDA survey showed total on feed supplies as of 1 November were 10.633 million head, 0.5 per cent higher than a year ago.

Prior to the report analysts were expecting the feedlot inventory to be down 0.4 per cent from a year ago.

Pork inventories as of 30 October were down 7.1 per cent from a year ago and also down 3.7 per cent from the previous month.

The draw down in total pork stocks was larger than normal for this time of year.

Ham inventories declined 16 per cent from the previous month, a larger than normal decline.

Belly stocks also were 17.5 per cent lower than the previous months when normally we see belly stocks actually start to increase in October.

It appears users are drawing down pork inventories in anticipation of higher supplies.

We think the smaller pork inventories create notable upside price risk, especially if end users shift some of their features after the holidays to pork.

Pork production is expected to increase but it may not increase as much or as fast as some expect.

Further Reading

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