Things to Consider…. Current cash, strong lean hog futures and a Bank of Canada noon rate not seen since early 2020 (graph shown below) have combined to provide a significant opportunity for hog producers looking to reduce risk for the coming production year as indicated by the attached forward margin graphs. For calculation purposes using an average farrow to finish feed cost of $141.00 (sow $15.00, wean to finsih $126.00) and all other fixed and variable costs at $70.00 for a total COP of $211.00, margins for the next 52 weeks are averaging near or above $30 CAD per head depending on contract arragements. Of course for producers who have a COP different then $211.00, margin will be relatively higher or lowed however considering the current landscape and production expectations, the markets have aligned to provide opportunity for the remainder of 2024 and much of 2025. The combination of strong lean hog futures, a weak Loonie and relatively lower feed costs is a combination not seen at these levels for several years. 
| November 5, 2024 OlyW20 Farrow to Finish Margin- 1 Year forward 
OlyW21 Farrow to Finish Margin- 1 Year forward 
ML Sig 4 Farrow to Finish Margin- 1 Year forward  |
Weekly Hog Price Recap Cash hogs were significantly higher this week across all markets as the counter-seasonal rally continues. National pm prices over the 5-day week recording a weekly average gain of $5.69 US per cwt, however Friday over Friday values were only $3.40 higher as the market peaked mid-week and pulled back Thursday and Friday. CME cash was $2.64 higher on the weekly average but finished Friday over Friday plus $3.83 US/cwt. Wholesale pork primals continued their strong run finishing $5.03 higher, or just over 5% above the week earlier. Cutout finished the week at $103.97 (Friday close), the highest week price seen since early August. |
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The trend of higher Canadian hog prices continued again as the combination of a strong US cash hog market combined with ongoing gains in the Canadian exchange rate pushing prices higher for another week. After making strong gains the week prior ML Sig 4 again registered gains of $5.58/hog from the week prior, Hylife recorded a gain of $9.49 and Olymel prices were both higher by $5.21 (OlyW21) and $4.56 (OlyW20). In the US, Tyson hogs had a significant gain of $9.59/hog while JM hogs climbed by $11.96 US/hog.
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Weekly Hog Margins Monitored Canadian hog margins were significantly higher week over week as strong hog prices were met with a steady feed cost this week. Western regions recorded gains ranging from $5-$10 per hog while Eastern markets were higher from $8 to $10 per hog. Canadian farrow-to-finish feed costs were slightly lower with $1 of the previous week as grain prices slid however the higher exchange rate limited losses. Ontario hog margins were higher, managing a positive move of $8.51 to $43.83/hog, ML Sig 4 (MB) margins were higher up $6.25 to $38.50/hog profits. Hylife margins rose the greatest within the Canadian market up $10.16 to $42.95/hog profits and OlyW 20 hog margins were higher by $5.88, while Quebec hog margins were the second largest gainer this week rising $9.77 to $43.43 per hog. OlyW 21 gained $5.88 to $28.04/hog profits. In the US, Tyson hog margins had a very strong week again adding another $$10.28 while JM margins were higher by $12.65 at $34.62/hog profits.
US Regional Margins - Tyson: $ 37.01 USD X 1.3914 = $ 51.50 in Canadian Dollars
- Morrell: $ 34.62 USD X 1.3914 = $ 48.17 in Canadian Dollars
Disclaimer: Commodity Professionals Inc. presents this report as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes only and should not be reproduced or transmitted by any means without permission. Commodity Professionals Inc. does not guarantee and accepts no legal liability arising from or connected to, the accuracy, reliability, or completeness of any material contained in the publication. |