Market Commentary: Friday, November 25/22

Transcript

Hog futures are trading lower at middayThe lean hog complex is keeping with its steady to somewhat lower trend heading into Friday afternoon. With some traders taking in a long-holiday weekend, there's not much news driving the livestock contracts ahead of Friday's end. Come next week, the market will be looking for early Christmas buying from retailers and is hopeful that pork cutout prices may see some support from that.

Cash hog prices on the National morning report are unreported, the morning cutout value is lower.

The Canadian Dollar is trading lower against the US dollar at midday. 

For the week ending Nov 25, the Western Hog Exchange OlyWest 20 weekly price is $2.10/kg dressed, the OlyWest 21 weekly price is $2.20/kg dressed, and the BP4 price is $2.12/kg dressed. This is Pat Matthezing reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

Things to Consider….

     The latest US livestock and meat trade data reflected stable US pork exports in the month of September. Total US pork exports at 513.0 million pounds were up a modest 544 thousand pounds from a month earlier and 2.8 million pounds over last year. Current US pork exports are down -13.4% year-to-date, largely attributed to the strong export rates recorded in the front-half of 2021.

     US pork to Japan rose 12.5m pounds in September, bringing current exports 5.6m pounds over last year, while pork to Canada jumped 11.3m pounds on the month but is 5.2m pounds under year ago levels. Other destinations recorded more moderate improvements such as Australia & the Dominican Republic which were each up more than 2 million pounds from August, and Colombia which climbed 1.1 million pounds. 

     US pork to Mexico and China* recorded the largest declines from the month previous with the Philippines, South Korea and Honduras also reporting notable 3-5 million pound reductions. Mexico dropped 10.5m pounds from August and while current export levels are 4.3m pounds under year ago levels, US pork to Mexico continues at strong levels historically. Mainland China decreased their imports of US pork by 8.7m pounds in the latest data, bringing total exports to China* (including Hong Kong and Taiwan) 8.9m pounds under last reported however 3.1m pounds over last year. 

     Total US pork imports for September fell 9.7m pounds or -8.7% under the month previous, bringing the latest imports 7.8m pounds or -7.1% under last year's record strong levels. Imports from Canada declined 4.0m pounds or -5.6% for September, down 3.4m pounds or -4.9% under last year. Notably, the US imported 14.9m pounds more pork from Canada than it exported to the country for the month of September.

  November 15, 2022


 




Weekly Hog Price Recap

Cash hogs were mixed to lower during the week, with regional cash down near daily while national cash recorded some mid and late-week improvements. CME cash was down each day with moves recording a generally steady pace. Wholesale pork primals finished mixed, with lower bellies, loins and butts weighing US pork cutout $1.16/cwt under the previous week's average.



Monitored hog markets continue to fall as a result of lower cash hog and pork values. Hog values out of Ontario dropped $12.75/hog, followed by those out of ML with the Sig 4 down $10.25/hog while those out of Quebec & Hylife were each down near $9/hog. The OlyW 20 fell $7.75/hog, while the OlyW 21 was down $4.60/hog and BP/TC declined $2.85/hog. In the US, Tyson hog values fell $7.45/hog while JM was $6.35/hog under the week previous. 

Weekly Hog Margins

Hog margins continue to be pressured by declines in hog and pork values, however were offset in part by a significant drop in feed costs this week. Canadian farrow-to-finish feed costs dropped $5.50/hog, while those in the monitored US region fell $2.25/hog from a week earlier.

Hog margins out the OlyW 20 weakened $2.30 to $29/hog profits. ML Sig 4 margins fell $4.75 to $12.60/hog profits, while Ontario hog margins weakened $7.25 to shy of $12/hog profits and the OlyW 21 strengthened $0.85 to $11.50/hog profits. Hylife margins were down $3.50 to $9/hog profits, while Quebec weakened $3.75 to $6.45/hog losses. In the US, Tyson margins declined $5.20 to more than $21/hog profits while JM weakened $4 to $10.60/hog profits from the previous week.
 

US Regional MarginsTyson:

  • Tyson: $ 21.12 USD X 1.3448 = $ 28.40 in Canadian Dollars
  • Morrell: $ 10.59 USD X 1.3448 = $ 14.24 in Canadian Dollars



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