Market Commentary: Friday, March 31/23


Hog futures are trading mixed at midday. At midmorning Friday, June hog futures are trading up 40 cents at $92.00, a neutral response to Thursday afternoon's Hogs and Pigs report. The report was neutral on the surface, but a little bearish for cash prices and April futures and a little supportive for the back months. 

Cash hog prices on the National morning report are lower, the morning cutout values are also lower.

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

For the week ending Mar 31, the Western Hog Exchange OlyWest 20 weekly price is $1.89/kg dressed, the OlyWest 21 weekly price is $1.99/kg dressed, and the BP4 price is $1.98/kg dressed. This is Pat Matthezing reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

Things to Consider….

The latest US Cold Storage numbers reported pork stocks at 521.2 million pounds for February, a modest 2.3m pounds higher from January and 42.9m pounds over year-ago levels.

Lessened amounts of loins, trimmings, butts, picnics and Other pork were offset by increased quantities of hams, variety meats, and bellies in the month of February. Compared to the lower supplies recorded for this time last year, most primals are above year-ago levels with exception to trimmings, and loins which were near even with levels reported a year earlier.

Total hams recorded the largest increase from previously reported (though considered seasonal), up 6.5m pounds on the month due to sharply increased bone-in hams while boneless supplies declined, bringing hams overall 857 thousand pounds over supplies recorded last year. Unclassified pork in cold storage rose 3.5m pounds on the month and is 3.4m pounds over last year, while variety meats were up 1.7m pounds from last reported and are 1.9m pounds over February of last year. Bellies in cold storage climbed shy of a million pounds on the month, bringing belly supplies 20.8m pounds over this time last year. Spare-ribs recorded very little change from previously reported, however compared to a year earlier rib supplies are up 9.7m pounds.

March 28, 2023

The category accounting for Other Pork fell 3.8m pounds on the latest report, bringing those supplies 5.7m pounds over last year. Total loins in cold storage fell 2.5m pounds from January levels, with the boneless variety accounting for the majority of the decline, bringing current loin stocks overall near even with a year earlier. Trimmings were down 2.0m pounds for February and 2.9m under 2022, while butts declined 1.5m pounds on the month but were 2.9m pounds over last year, and bone-in picnics fell 572 thousand pounds on the month but is 793 thousand pounds over 2022.

Weekly Hog Price Recap

Cash hogs were generally mixed however finished the week lower, with national cash down near daily while regional cash went unreported late-week.

CME cash declined daily, with mid-week moves down the most compared to other days. Wholesale pork values were recorded lower across all primals, particularly bellies and hams, weighing US pork cutout $4.93/cwt under the previous week's average.

Monitored hog markets were generally $2-$6 per hog lower on the week. Hog values out of Ontario fell $6.65/hog and Hylife was down $6.25/hog, while the ML Sig 4 fell more than $5/hog and Quebec was down $2.75/hog. Markets derived from lagged base pricing moved more moderately with the OlyW 21 down $2.30/hog and the OlyW 20 a modest $0.10/hog lower, while BP/TC improved $2.35/hog. In the US, Tyson hogs were down $0.70/hog while JM declined shy of $3/hog from the previous week.

Weekly Hog Margins

Monitored margins were moderately mixed on the week due to lower hog and pork values, coupled with a considerable reduction in feed costs. Canadian farrow-to-finish feed costs dropped $3/hog, while those in the monitored US region declined $2.30/hog from the previous week.

Hog margins out of the OlyW 20 improved $3 to $7/hog losses, followed by those off the ML Sig 4 which weakened more than $2 to $7.75/hog losses. Hylife margins were down $3.25 to nearly $13/hog losses, while Ontario weakened $3.60 to $18.25/hog losses. Hog margins out of Quebec recovered a modest $0.25 while OlyW 21 margins improved $0.75, with market finishing the week near $19/hog losses. In the US, Tyson margins strengthened $1.60 to $0.45/hog losses while JM weakened $0.55 to $6.80/hog losses for the week.

    US Regional Margins – Tyson -$0.43 USD X 1.3705 = -$0.59 in Canadian Dollars
                                       Morrell -$6.81 USD X 1.3705 = -$9.33 in Canadian Dollars

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