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Market Commentary: Friday, April 9/21

Transcript

Hog futures are trading modestly higher at midday as the vigorous gains subside. The underlying tone of the market is still fully supportive as phenomenal demand and tightening supplies entice higher prices. As traders start moving away from the soon-expiring April contract, that contract is trading slightly lower, while the rest of the complex is continuing to trade higher.

Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady to higher. Prices are lower on the National morning report and the morning cutout value is higher. 

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

For the week ending Apr 9, the Western Hog Exchange OlyWest 20 weekly price is $2.25/kg dressed, the OlyWest 21 weekly price is $2.33/kg dressed, and the BP4 price is $2.16/kg dressed. This is Kerrie Simpson from the Western Hog Exchange.

Weekly Regional HOG PRICE Report

 

Things to Consider….

The USDA's Quarterly Hogs & Pigs report was released Thursday, March 25th reporting declines in all categories. All Hogs & Pigs fell 2,539 thousand head from the tally reported in December, bringing the latest inventory 1,406 thousand under March of last year. 

Kept for Breeding fell 1% or 61 thousand from the figure for December, which is 2.5% or 160 thousand under last year. 

Market hogs fell 3.5% or 2,478 thousand head from last quarter and sits 1.8% or 1,246 thousand head under last year.   The March pig crop declined 1,694 thousand head from previously reported, brining the pig crop 475 thousand head under year ago levels. 

Pigs per litter slipped below 11 for the first time in 2 years, reported at 10.94 pigs/litter for the Dec-Feb period. 

Report revisions, as reported by the USDA:

All inventory and pig crop estimates for March 2020 through December 2020 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. The revision made to the December 2020 all hogs and pigs inventory was 0.2 percent.

With sow numbers now at a 3-Year low of 6.215 Million the question arises of how quickly the industry will turn around and produce more pounds of pork. With lean hog futures and cash markets at record highs it will only be a matter of time before expansion begins and hog numbers level out.  Any increase in the breeding herd during the upcoming summer months will only begin to impact market hogs once in the middle of 2022.

For now, hog producers can expect strong base pricing and competitive markets unless a major shift in demand is registered in the short-term.

From the supply side, the market has plenty of support, from the demand side, things are positive for now, but have been known to change more drastically then supply.                                             

  March 30, 2021


Weekly Hog Price Recap

Cash hogs recorded another good week of strength amid daily rises, with national cash up more in the latter half of the week. CME cash also improved daily, with better gains early and late in the week. Most wholesale pork primals also rose on the week, with pork cutout $4.47/cwt over the previous week.  
 


Market hog values strengthened as much as $12.50/hog this past week, with those out of Quebec up the most. Hog values out of Ontario were up $11.25/hog, followed by Hylife which climbed $11/hog. The Sig 4 rose shy of $9/hog, while the OlyW 20 & 21 were each up $7/hog and BP/TP was up $5.25/hog from the previous week. In the US, Tyson was up $8.75/hog while JM increased more than $19/hog from week ago levels.

Weekly Hog Margins

Hog margins continue to strengthen amid ongoing rises in hog and pork values and were further supported by a decline in feed costs. Canadian farrow-to-finish feed costs declined $0.50/hog while feed costs in the monitored US region $1.25/hog from week earlier.


Hog margins out of the OlyW 20 again finished the week the strongest north of the border, up $7.50 to more than $45.75/hog profits. Ontario strengthened near $11.75 to $44.25/hog profits, while Quebec margins improved $13 to $43/hog profits. Margins out of Hylife strengthened $11.50 to $41.25/hog profits while ML Sig 4 margins improved nearly $9.50 to $35/hog profits and the OlyW 21 strengthened near $7.75 to $32.50/hog profits. In the US, hog margins improved near $10.50/hog with Tyson reaching $54.50/hog profits while JM margins were closer to $52.25/hog profits from a week earlier.            
                                                 US Regional Margins

  • Tyson: $ 54.44 USD X 1.2565 = $ 68.40 in Canadian Dollars
  • Morrell $ 52.21 USD X 1.2565 = $ 65.60 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.