Things to Consider….

With the recent release of the November WASDE report, soybean and soymeal futures have added to recent strength continuing to bounce off the low established in mid-October (13th) .  Within the November Supply/Demand report was nothing overly surprising other than a slight decline in estimated yield which decreased production by  23 million bushels from the October report.     The drop in production however was easily offset by a 40 million bushels decline in export projections resulting in a positive influence on ending stocks of 20 million bushels.

Seasonally, as shown in the Weekly Nearby futures graph, October and early November have proven to be a potentially rewarding time of the year to purchase protein requirements and so far, based on market activity it appears 2021 is following a similar pattern.  With the low of the futures market around $318 US per short ton, and spot cash very similar, hog producers looking to extend feed protection for the rest of 2021 and into 2022 should use that value as a gauge for adding to existing coverage.     Producers without any protein coverage should consider protection on any move of the soymeal futures below $330 US per short ton.  A value of $330 US per short ton or lower would represent pricing in the bottom 15% of the current $80 US range.

  October 26, 2021

Weekly Hog Price Recap

Cash hogs again declined for much of the week with Thursday down the most, and regional cash improved an additional day compared to national cash. CME cash fell daily, with heavier declines reported late-week. Most wholesale pork values fell excluding hams which were up on the week, weighing US pork cutout $5.82/cwt under the previous week's average.  

Market hog values were generally $10-$17/hog lower on the week, with those out of Quebec down the most, $16.75/hog lower. Hog values out of Hylife and the OlyW 20 & 21 were each down between $13.50-$14/hog, while Ontario fell $11.50/hog and the ML Sig 4 was down closer to $11.25/hog. BP/TC hog values fell near $9.75/hog. In the US, hog values out of Tyson declined nearly $4/hog while JM was shy of $3/hog from week ago levels.  

Weekly Hog Margins

Monitored hog margins weakened on continued declines in hog and pork values, and were further pressured by a rise in feed costs. Canadian farrow-to-finish feed costs climbed $1.85/hog while those in the monitored US region were up $1.75/hog from a week earlier. 

Hog margins out of the OlyW 20 & OlyW 21 each weakened near $15.25 to $37 and $33.25/hog profits respectively, followed by margins out of Quebec which fell more than $18.50 to shy of $33.50/hog profits. Hylife weakened $15.75 to $23.75/hog profits, while Ontario margins declined near $13.25 to $20.50/hog and the ML Sig 4 was down $13 to $20.50/hog. In the US, hog margins out of Tyson weakened nearly $5.75 to $6.75/hog profits while JM margins weakened nearly $4.75 to $3.75/hog losses.

US Regional Margins

  • Tyson: $ 6.65 USD X 1.2354 = $ 8.22 in Canadian Dollars
  • Morrell: $ (3.79) USD X 1.2354 = $ (4.68) 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.