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Market Commentary: Monday, November 19/18

Transcript

Hog futures are trading, higher in all months. Firm buyer support has stepped back into the complex with February futures gaining the most support and also becoming the most actively traded. Follow-through support is developing following the limit gains on Friday. Most contracts are 50 to 80 cents per cwt higher as very limited interest is seen through most contract months. This could limit additional direction later in the session, as prices seem content on recent market firmness, but unable to spark any aggressive buyer activity.

Cash hog trade is expected steady to $1 lower with bids scattered through the range. Prices are lower on the National and unreported on the Iowa Minnesota morning reports. The morning cutout value is higher.  

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

For Monday, Nov 19, the Western Hog Exchange OlyWest price is $1.305/kg dressed and the OlyWest plus price is $1.315/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange. 

Forward Contracting at Christmas/New Years


Re: Forward  Contracting for the holiday shortened weeks of December 23, 2017 to January 5, 2018

Dear Western Hog Exchange Producers,

Please be advised that due to the 3 day week during the Christmas break and 4 day week of New Years, Forward Contracting limits have been reached.
No further Forward Contracts will be taken for those weeks.

We recommend talking to Olymel Hog Bookings, early to schedule your loads. It may be advisable to ship early if that is possible for your operation.
They can be reached at: at (403) 343-8700 or 1 (877) 488-8700 ext 5281 or ext 5287.

Weekly Regional HOG PRICE Report

 


Things to Consider….

Retail bacon prices fell 8 cents or -1.4% to $5.50/lb for September 13.6% under last year.  Current retail bacon price levels are 36 cents under the 3-year average for the month of September.  Wholesale belly prices by comparison rose 18.3% for September, up $16.05 to $103.86/cwt for the monthly average. 


Overall, chop prices fell 5 cents or -1.5% from last reported, bringing chops 19 cents or 5.5% under last year.  Current retail price levels are 39 cents under the 3-year average for the month of September.  Boneless chop prices dropped 13 cents to $3.70/lb for September.     This brings boneless chops down 2.9% or 11 cents under last year.  Bone-in chop prices declined 4 cents from August, down 1.1% to $3.80/lb, bringing the cut 2.5% under last year.  Wholesale loins for the month of September rose $5.45 to $70.15/cwt, or +7.3% from August.   


The total category for hams rose 2 cents or 0.8% to $3.22/lb for September, bringing hams 11 cents or +3.6% over last year.     Current retail price levels are 10 cents over the 3-year average for the month of September. Boneless hams edged 2 cents lower or -0.5% to $4.17, bringing them 5.8% or 23 cents over last year.  Wholesale ham prices for September averaged $56.63/cwt, up $0.26 or 0.5% from August.     For comparison, wholesale picnics averaged $48.65/cwt, up $6.12 or 14.4% over values reported for September.     


In summary, retail values of pork have struggled in some areas but been positive in others.  Given the large amount of supplies being pushed through the market and stability in the retail and wholesale side is positive.  Domestic demand continues to perform well which offers good potential for prices once into the beginning of 2019 which historically can be more positive than the end of November.    


November 13, 2018






Weekly Hog Price Recap

Cash hog values slid throughout the week, with regional and national pricing down significantly more to start the week compared to CME cash.  Regional cash declined near $0.40-$1.75 daily, while national cash was down near $0.50-$1.20 daily. CME cash by comparison was modestly lower to as much as $0.60/cwt lower day-to-day. Daily cash bid volume was mostly moderate, peaking highest on Tuesday. Weakness in wholesale pork values continue to pressure cash hog markets, with cutout $3.63/cwt lower than a week earlier.




All monitored Canadian markets were reported lower on the week, particularly those based off regional or national cash pricing. The WHE fell $4/hog from a week earlier while the Sig 3 dropped $7.50/hog, dragging the Sig 5 closer to $4.50/hog lower on the week. Pricing out of Thunder Creek fell $0.50/hog, while remaining Canadian markets from MB through Quebec fell $1-1.50/hog.  In the US, Tyson values declined $0.70/hog while JM values dropped the most on the week, falling shy of $8/hog.


Weekly Hog Margins

Hog margins continue to slide on declining hog market values and increased feed costs. Farrow to finish feed costs rose $1-1.50/hog north of the border while those in monitored US regions rose closer to $0.50/hog. Hog margins based off the Sig 5 weakened shy of $6/hog, followed by those out of the WHE which were closer to $5/hog lower than last week. Remaining monitored Canadian markets were generally $2-$3/hog weaker.  In the US, Tyson margins declined $1.25/hog and JM margins were calculated nearly $8.50/hog weaker than last reported.

US Regional Margins

- Tyson $1.99 USD X 1.3128 = 2.61 in Canadian Dollars

- Morrell $(8.80) USD X 1.3128 = $(11.55) in Canadian Dollars



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