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Hog futures are trading lower, with moderate to firm pressure erasing most if not all of the price gains seen yesterday. Despite higher cash and wholesale pork prices through the week and positive export numbers from China, traders are hesitant about moving back into the buyer side of the market. Mixed messages are seen surrounding the progress of trade negotiations with China. This is all leading up to another round of tariffs set to be implemented on December 15. February hog futures continue to hold well above support levels thanks to early week buying, but lack of support through the end of the week could quickly erode any positive tone which has developed through the complex.
Cash hog bids are called steady to $1 higher; most bids steady to 50 cents higher. Prices are higher on the National and on the Iowa Minnesota morning reports. The morning cutout value is also higher.
The Canadian Dollar is trading higher against the US dollar at midday.
For Thursday, December 5 the Western Hog Exchange OlyWest 19 base price is $1.346/kg dressed. This is Crystal Waldner reporting from the Western Hog Exchange.
Things to Consider….
US Cold Storage reported total pork stocks at 614.5 million pounds for October, up 2.6% or 15.8 million pounds over levels reported for September. This brought pork in cold storage 7.6% over the same time last year.
Total hams in cold storage which peaked in September have contracted seasonally for October with the onset of holiday ham buying. Total hams dropped 27.5 million pounds for October and now 1.3% under last year, with bone-in and boneless varies each falling 13-14 million pounds from the previous month. Picnics in cold storage climbed 1.3 million or 15.6% higher into October and is currently near 26% higher than year ago levels. Variety meats was the only other pork category to report lessened volumes on the latest report, down shy of a million pounds or 3% lower than reported in September.
Most pork categories reported increased volume in cold storage with quantities of spare-ribs up the most, rising 15.5 million pounds and representing an 18% rise from September levels. Spare-ribs in cold storage tend to climb from August through to March/April.
Bellies, butts, trimmings, other and unclassified pork categories in cold storage were each up around 5 million pounds in October, while volume of total loins in storage was up 2.3 million pounds on primarily increased amounts of boneless varieties.
Historically speaking, total US pork in cold storage tends to fall into the end of the calendar year, a reflection of the decreasing supplies of hams in storage due to holiday ham buying. However this year, the massive slaughter numbers in the US are contributing to more meat hitting the freezers.
Recent lean hog futures activity has appeared to stabalize with mostly two sided trade over the last couple of weeks. With the downside pressure easing producers should be patient with adding to protection for 2019.
November 19, 2019
Weekly Hog Price Recap
Cash hog values declined daily excluding Friday with volume throughout the week considered modest to moderate. CME cash by comparison was weakest early on while late-week improvements helped offset some of the earlier weakness. Wholesale pork values improved the majority of the week, driving pork cutout $6.91/cwt over the previous week.
The majority of monitored Canadian hog markets were weaker from the previous week, excluding values out of Quebec and the OlyW 19. Quebec hog values surged $17.50/hog, supported higher by cutout, while the OlyW 19 climbed $1/hog. Remaining Canadian hog markets fell, with Hylife and the Sig 4 each down less than $0.50/hog while values out of Ontario fell near $1.50/hog and the Sig 5 dropped $4/hog. In the US, Tyson values fell $9/hog while JM values were $4.75/hog lower than week ago levels.
Weekly Hog Margins
Hog margins were generally weaker on continued declines in cash hog values, with some reaching 6 week lows. Farrow-to-finish feed costs declined modestly, offering very little in the way of support on either side of the border, down generally $0.20-$0.30/hog from week ago levels.
Hog margins improved the most out of Quebec, up more than $17.50/hog, with the OlyW 19 also reporting improved margins which were up $1/hog. Remaining monitored hog markets calculated weaker margins from week ago levels. Those based out of the Sig 5 were down $3.75/hog and Ontario nearly $1.50/hog weaker while the Sig 4 and Hylife were modestly flat to weaker. In the US, margins calculated out of Tyson weakened $8.25/hog while those out of JM fell $4.50/hog from a week earlier.
US Regional Margins
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