Market Commentary: Friday, September 24/21

Transcript

Hog futures are trading mixed in a narrow range at midday. Traders continue to focus on the upcoming Hogs and Pigs report, which will be released this afternoon. The expectation is that overall hog numbers will see a 2% reduction from year-ago levels. A move in this range should not be a significant market mover as traders continue to focus on slightly lower hog herd sizes until the middle of 2022. Significant shifts in farrowing intentions through the end of the year will likely be an indicator of any sizable market adjustments in the near future.

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

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

For the week ending September 24 the Western Hog Exchange OlyWest 20 weekly price is $2.13/kg dressed, the OlyWest 21 weekly price is $2.26/kg dressed, and the BP4 price is $2.13/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange.

Weekly Regional HOG PRICE Report

 

Things to Consider….

Retail bacon prices rose 24 cents or +3.5% to $7.10/lb, bringing retail values +27.6% or $1.54 over year ago levels. Current retail bacon price levels are $1.53 over the 3 year average for the month of August, and has reached a new historical high surpassing the previous high reached in July 2021 at $6.86/lb.

In comparison, wholesale belly prices rose +4.2% or $8.54 to $213.62/cwt for August and reached a new historical high, surpassing the previous record high of $209.41 reach in July 2017. Compared to last year, bellies are up +98.8% or $106.15 higher. 

All retail chops declined 2 cents or -0.6% to $4.06/lb for August however was 27 cents or +7.1% over last year. Current retail price levels are 56 cents over the 3 year average for the month of August. Boneless chops edged 1 cent higher or +0.3% to $4.47/lb, bringing boneless chops +2.9% or $0.13 over last year. Bone-in chops edged modestly higher, up less than half a cent or +0.1% to $4.33/lb, bringing the cut also +6.6% or 27 cents over year ago levels. Wholesale loins were up $6.62 to $116.16/cwt or +6.0% higher than the previous month, and +62.9% or $44.86/cwt over last year. 

All retail hams climbed 4 cents or +1.0% to $3.75/lb for August, with no year-over-year comparison. Current retail price levels are 49 cents over the 3 year average for the month of August. Boneless ham values edged 2 cents higher or +0.3% to $4.68/lb for August, bringing them 5 cents or +1.1% over last year. Wholesale ham prices averaged $85.82/cwt which was down $16.32/cwt or -16.0% from July and $27.68/cwt or +47.6% over year ago levels.  

The category reporting other retail pork prices declined 9 cents or -2.5% to $3.47/lb, slipping from the new historical high reached on the previous report to the second highest historically. Current levels are 70 cents over the 3-year average for the month of August.

Meat values, both retail and wholesale remain historically firm however seasonal pressures have played a major role in forward pricing over the last week to 10 days.  Signs of technical support appear to be surfacing which could provide a near-term bottom to hog futures over the coming weeks.

  September 7, 2021

Weekly Hog Price Recap

Cash hogs declined daily again the past week, with regional cash down the most Tuesday while national cash was pressured more Wednesday. CME cash declined most of the week, with heavier pressure on prices late-week. Wholesale pork primals fell, particularly bellies, ribs and loins, which weighed pork cutout $4.96/cwt under the previous week's average.    


Canadian market hog values dropped as much as $12/hog on the week, with those out of Quebec were down the most. The OlyW 20 was down $11.75/hog, while Ontario hog values fell $11/hog and the OlyW 21 declined near $10.50/hog. Hylife was down more than $9.75/hog, while the ML Sig 4 was declined $8.50/hog and the BP/TC was down $4.25/hog from a week earlier. In the US, hog values out of Tyson fell $9.50/hog while JM declined $11.25/hog from week ago levels.  

Weekly Hog Margins

Hog margins continue to weaken amid lower hog and pork values however did receive some offset support from a decrease in feed costs. Canadian farrow-to-finish feed costs fell $2/hog while those in the monitored US region declined $0.75/hog from a week earlier.

Hog margins out of the OlyW 20 weakened $9.70 to $81.25/hog profits, while those out of Quebec fell $10 to $70.25/hog profits and Ontario declined $9 to more than $66/hog profits. OlyW 21 margins were down $8.35 to $62.75/hog profits, ML Sig 4 margins weakened $6.45 to $59.50/hog profits, and Hylife dropped $7.80 to $55.75/hog profits. In the US, hog margins out of Tyson weakened $8.15 to $62/hog profits while JM margins were $10.55 lower to nearly $55.50/hog profits.

 US Regional Margins

  • Tyson: $ 62.08 USD X 1.2584 = $ 78.12 in Canadian Dollars
  • Morrell  $ 55.40 USD X 1.2584 = $ 69.72 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.