Market Commentary: Wednesday, February 28/24

Transcript

Hog futures are trading higher at midday. The sentiment around US pork demand seems to be improving, which in turn is providing futures with a lift. Recent USDA data confirms a tighter pork supply/demand picture than previously forecast. Supporting the uptick in futures is higher cutout prices. The market is hoping to see another strong export sales report on Thursday and if traders do indeed see substantial export interest, the market's higher trend could continue. 

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

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

For the week ending Mar 1, the Western Hog Exchange OlyWest 20 weekly price is $1.92/kg dressed, the OlyWest 21 weekly price is $2.09/kg dressed, and the BP4 price is $1.90/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

 

Weekly Regional HOG PRICE Report

Things to Consider….

The latest US Cold Storage numbers reported pork stocks at 468.0 million pounds for January, up 40.6m pounds from December however is 50.9m pounds under year-ago levels. Notably, December's cold storage was revised only modestly higher from 427.3m pounds up to 427.4m pounds.
 
 Most pork categories increased from the previous month, excluding lower quantities of bone-in picnics and the category accounting for Other pork, however are also well under stocks reported for January 2023 with exception to variety meats and unclassified pork.
 
 Total hams overall in cold storage increased the most on the month, rising 19.2m pounds from December stocks with current supplies 4.3m pounds under a year earlier. Bone-in hams were up more in January compared to the boneless variety, however were also moderately higher than last year while boneless ham supplies were significantly lower. Spare-ribs were up 8.7m pounds in January though are a notable 27.2m pounds under last year, while pork bellies increased 8.0m pounds from a month earlier however are down 5.9m pounds compared to a year earlier.
 
 Pork butts and variety meats each reportedly increased stocks by 2.4m pounds in January, with butts down 7.7m pounds compared to last year while variety meats were up 6.3m pounds from a year earlier. Total loins overall were up 20.m pounds in January and a modest 687 thousand pounds lower than year-ago supplies, with the boneless variety up significantly on the month though near even with last year and the bone-in variety lower compared to a month and year earlier.
 
 Trimmings and unclassified pork were each up shy of 1.0m pounds for January, however current trimming stocks are 4.9m pounds under last year while classified pork supplies are up a more moderate 214 thousand pounds compared to January 2023. Bone-in picnics declined 526 thousand pounds in the latest data, bringing current stocks 3.4m pounds under last year, while the category accounting for Other pork dropped 3.4m pounds in January and is also 3.4m pounds under year-ago supplies.

  February 27, 2024

 
   



 



Weekly Hog Price Recap

Regional and national cash hogs improved throughout much of the week, pulling back partially Friday. CME cash climbed daily with stronger rises recorded mid-week. Wholesale pork primal values improved again this past week with most primals up 4-5% from the previous week's average. US pork cutout averaged $3.46/cwt over the previous week.


Monitored hog markets recorded significant increases on the week, attributed to notably improved cash prices. Quebec hogs improved the most, surging $10.75/hog, followed by those out Ontario which rose $9/hog. Hylife hogs were up $8.15/hog, while the ML Sig 4 gained $7.20/hog. Hog values off the OlyW 20 improved $4.65/hog, while the OlyW 21 was up $4.30/hog and BP4/TC4 climbed $0.60/hog. In the US, Tyson hogs increased $6.35/hog while JM hog values rose $7.20/hog from a week earlier.
 

Weekly Hog Margins

Monitored hog margins strengthened is rising hog values and were further supported by another reduction in feed costs. Canadian farrow-to-finish feed costs fell $1.65/hog while those in the monitored US region declined $1.25/hog from a week earlier.

Hylife hog margins strengthened $9.80 to $11.30/hog profits on the week, followed by those off the ML Sig 4 which improved $8.85 to $8.25/hog profits. Ontario hog margins strengthened $10.70 to $6.20/hog profits while those out of Quebec surged $12.40 to $5.15/hog profits. OlyW 20 hog margins strengthened $6.30 to $1.45/hog losses while those off the OlyW 21 improved $6 to $3.85/hog losses. In the US, Tyson hog margins were up $7.60 to $8.20/hog profits while JM margins strengthened $8.45 to $5.40/hog profits for the week.
 

US Regional Margins

  • Tyson: $8.22 USD X 1.3505 = $11.10 in Canadian Dollars
  • Morrell: $5.42 USD X 1.3505 = $7.32 in Canadian Dollars       



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