Market Commentary: Wednesday, January 19/22

Transcript

Hog futures are trading higher in all months as the market has seen strong interest in the cash market, midday pork cutout values are higher, and it looks as though packers may be able to process more hogs as well. A positive export report tomorrow will support the market further.

Cash hog prices on the National morning report are higher, the morning cutout value is also higher. 

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

For the week ending January 21, the Western Hog Exchange OlyWest 20 weekly price is $1.70/kg dressed, the OlyWest 21 weekly price is $1.86/kg dressed, and the BP4 price is $1.72/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

 

Things to Consider….

The latest US livestock and meat trade data recorded total US pork exports up 39.7 million pounds or +7.4% from previously reported, which is down 52.2 million pounds or -8.3% from the highs last year.

     US pork to Japan increased the most during November, rising 13.3 million pounds, followed by South Korea and Mexico which were up 11.7 and 11.2 million pounds respectively. Notably, Mexico reached a new historical high, surpassing the previous high reached a month earlier. US pork to Colombia rose 8.1 million pounds—also reaching new historical high, while other destinations such as Honduras, Canada and the Dominican Republic were each up 3-5 million pounds. US pork to Canada accounted for 8.9% of the total monthly US export volume for November, which is +0.8% above the 12-month average.

     Tempering some of these increases were lessened volumes of US pork to destinations such as China*, Australia and the Philippines. Pork to mainland China fell 4.7 million pounds while Hong Kong slipped 540 thousand pounds and Taiwan edged 46 thousand pounds lower in November for an adjusted China* decline of 5.3 million pounds or -10.0% from October. Australia also declined 5.3 million pounds for November, while the Philippines fell 4.5 million pounds.

     Total US pork imports reached a new historical high at 132.0 million, surpassing the previous high recorded in October at 115.6 million pounds. Imports from Canada climbed 6.5 million pounds or +8.8% for November, bringing US imports from Canada 27.0 million pounds or +50.1% over year ago levels, while imports from Mexico slipped 379 thousand pounds or -3.0% for November which is up 4.9 million pounds or +65.8% over last year. Notably, the US imported 29.0 million pounds more pork from Canada than it exported to the country for the month of November.

  January 4, 2022









Weekly Hog Price Recap

National and regional cash hogs varied during the holiday-shortened week, with regional cash unreported for nearly half of those days. Although CME cash improved modestly throughout much of the week, CME cash finished under a week earlier. Wholesale pork values also varied on large day-to-day swings in primals, though primarily loins and bellies. Despite the variability many primals finished higher, which resulted in pork cutout ending $0.33/cwt over the previous week.



Canadian market hog values generally declined on cash hog pricing and the lower rate of exchange. Hog values out of Quebec declined more than $6.50/hog, while those out of Ontario were down $2.25/hog and the ML Sig 4 fell $1/hog from a week earlier. The OlyW 20 slipped $0.50/hog while the OlyW 21 was unchanged from the week previous, and BP/TC improved more than $2/hog while Hylife rose $3/hog. US hog values improved, with Tyson up $1.50/hog while JM rose $1.75/hog from week ago levels. 

Weekly Hog Margins

Most Canadian hog margins weakened on lower hog values and an uptick in feed costs. Canadian farrow-to-finish feed costs edged shy of $0.25/hog higher, while those in the monitored US region were up $1/hog from a week earlier. 

Hog margins out of Ontario weakened more than $2.25 to near $21.75/hog losses, while the Sig 4 fell more than $1 to $14.50/hog losses. Hog margins out of Quebec weakened $6.75 to more than $9.75/hog losses, while the OlyW 21 edged less than $0.25 lower to near $9.25/hog losses. OlyW 20 margins fell more than $0.50 to more than $8.75/hog losses while Hylife strengthened more than $2.75 to $8.25/hog losses. In the US hog margins improved, with Tyson up $0.50 to more than $14/hog losses while JM strengthened $0.75 to $24/hog losses from the previous week.
 

    US Regional Margins

  • Tyson: $ (14.16) USD X 1.2753 = $ (18.06) in Canadian Dollars
  • Morrell: $ (24.00) USD X 1.2753 = $ (30.61) in Canadian Dollars



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