Market Commentary: Tuesday, June 28/22

Transcript

Hog futures are trading lower in all months and pork cutout values are lower as well. By tomorrow afternoon, the market will finally have the latest Quarterly Hogs & Pigs report. The average estimates for the report shared that all hogs and pigs are estimated at 99.3%, kept for breeding at 98.9% and kept for marketing at 99.3%. More cash interest may develop throughout the afternoon as packers weren't aggressive buyers in Monday's market.

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

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

For the week ending July 1, the Western Hog Exchange OlyWest 20 weekly price is $2.59/kg dressed, the OlyWest 21 weekly price is $2.56/kg dressed, and the BP4 price is $2.48/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

 

Things to Consider….

US federally inspected hog slaughter was reported at 2,044 thousand head: down -12.8% for the Memorial Day holiday week, +2.9% over the same week last year and -3.8% under last year-to-date. 

US sow slaughter for the week ending May 21st was up +10.9% from the previous week to 62,600 head, which is +4.1% compared to last year and -5.9% compared to last year-to-date. 

US pork production for the holiday week fell 66.2 million or -12.9% to 445.5 million pounds, bringing overall production +4.2% compared to last year and -3.4% under last year-to-date. 

Market hog weights continue at high levels seasonally. Weekly average barrow and gilt weights in the ISM reporting area for the week ending May 28th was reported at 286.4 lbs, down a modest 0.2 pounds or -0.1% from a week earlier and up +1.2% or 3.3 lbs over year ago levels. Year-to-date, hog weights reported for 2022 are +0.5% over the same weeks in 2021.

Canadian federally inspected hog slaughter for the week ending May 28th was reported at 349.2 thousand head, down 56.0 thousand or –13.8% for the Victoria Day holiday week and +3.9% or 13.1 thousand over the same week last year. 

Canadian pork production for the same period was estimated at 38,329 metric tons, down 6,157 MT or –13.8% on the week and up 2,495 MT or +7.0% from year ago levels.

Lean hog futures continue to trade in a newly established range, off the highs reported earlier in the year.  Producers should begin to finalize decisions for late year forward contracting as seasonally the market begins to experience weakness following the heat of the summer.

  June 7, 2022




Weekly Hog Price Recap

Regional and national cash hogs improved for much of the week, particularly Wednesday, however recorded a significant decline Friday. CME cash also improved overall, recording a modest decline mid-week however was up significantly at the week's end. Most wholesale pork primals finished higher, excluding ribs, supporting US pork cutout $2.45/cwt over the previous week's average.



Market hog values improved overall, with those derived from lagged base pricing up the most on the week. OlyW 21 hog values rose $7.30/hog, while the OlyW 20 was up $6.75/hog and BP/TC were up $6.15/hog. Hog values out of Quebec improved $4.25/hog, while the ML Sig 4 edged $0.10/hog higher. Hylife declined $1/hog while hog values out of Ontario slipped near $0.20/hog. In the US, Tyson climbed $1.70/hog while JM rose $3.35/hog from week ago levels. 

Weekly Hog Margins

Monitored hog margins recorded strong improvements on the week, primarily due to a significant reduction in feed costs. Canadian farrow-to-finish feed costs dropped $8.50/hog, while those in the monitored US region were down $7.45/hog from a week earlier.
 
 Hog margins out the OlyW 20 strengthened $15.25 to $52.10/hog profits on the week, followed by those out of Ontario which improved $8.30 to $42.35/hog profits. Hog margins out of the ML Sig 4 improved $8.55 to $32.15/hog profits, while Hylife margins rose $7.50 to $29.70/hog profits and OlyW 21 margins strengthened $15.80 to $25.15/hog profits. Hog margins out of Quebec improved to profitable levels, strengthening $12.75 to $1.75/hog profits. In the US, Tyson margins rose $9.15 to $68.25/hog profits while JM strengthened $10.75 to $69.60/hog profits from the previous week.
 

US Regional Margins

  • Tyson: $ 68.25 USD X 1.2625 = $ 86.17 in Canadian Dollars
  • Morrell: $ 69.62 USD X 1.2625 = $ 87.90 in Canadian Dollars


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