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Market Commentary: Friday, May 29/20

Transcript

Hog futures are trading mixed, mostly lower at midday. Limited pressure is seen in hog futures trade following near-limit losses yesterday. The ability to show moderate export sales last week to China helped to stem the downward price spiral. The focus on issues between China and Hong Kong and response by the U.S. continues to be the main focus in the hog complex as it may continue to focus on eroding export markets to the country. But for now, traders are showing limited expectations of further pressure given current domestic demand. Hog slaughter levels are expected to remain stable to stronger over the near future which helps to put more emphasis on providing adequate pork supplies to the consumer market. 

Cash hog bids are called $1 lower to $1 higher with most bids steady to $1 lower. Prices are lower on the National and on the Iowa Minnesota morning reports. The morning cutout value is higher. 

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

For the week ending May 29, the Western Hog Exchange OlyWest 20 weekly price is $1.682/kg dressed and the BP4 price is $1.7539/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange. 

Weekly Regional HOG PRICE Report

 

Things to Consider….

After a near record breaking week in pork prices here is a review of current retail and wholesale pork situation by cut.


Retail bacon prices for March climbed 1.7% or 9 cents higher to $5.35/lb, bringing the cut -3.7% under last year.  Current retail bacon price levels are 24 cents under the 3-year average for the month of April.

Wholesale belly prices by comparison dropped $6.49 or -8.8% for the same period, reported at $67.19/cwt for April. Notably, wholesale belly values are more than $82/cwt under year ago levels, or 55% under last year. 


Overall, chop prices were up 26 cents or 7.6% higher for April at $3.67/lb, bringing chops 32 cents or 9.5% over last year.  Current retail price levels are 31 cents over the 3-year average for the month of April.  

Boneless chop prices rose 22 cents to $4.01/lb, bringing boneless chops 5.5% or 21 cents over last year. 

Bone-in chop prices jumped 24 cents for April to $4.15/lb, bringing the cut 9.8% over last year or 37 cents higher. 

Wholesale loins for the month increased $14.75 to $96.35/cwt or 18.1% over the previous month, and 28.3% or $21.26/cwt over last year. 


The figures reported by the USDA excluded an update for hams and other retail pork values, however wholesale hams fell $12.02 or 

-22.1% to $42.26/cwt for the month of April. This brings wholesale ham values $23.71 under last year or 35.9% under April 2019.

Wholesale picnics fell $17.02 to $43.24/cwt from last reported, 21.1% under year ago levels and the weakest monthly figure since Mar 2019. 

Wholesale butts fell $27.44 to $72.81, and spareribs dropped $32.01 to $113.88/cwt from the monthly figure reported for March.  


As illustrated some cuts are showing a significant deviation from retail to wholesale while other are maintaining a more consistent value spread.  With US hog slaughter beginning to rise the drop off in cut-out is likely to continue which will force some prices lower in the coming weeks which are tied to meat values.  

May 19, 2020




Weekly Hog Price Recap

Cash hog values varied however generally began the week lower with more moderate moves the remainder of the week, while regional cash went unreported Wednesday. National cash bid volume was generally considered moderate. CME cash began weaker however rose on mid-week improvements. Most wholesale pork primals finished stronger on the week despite some daily pullbacks, excluding hams and bellies which were lower overall. Pork cutout was up $1.18/cwt from the previous week.


 

The OlyW 20 and BP/TCP were up the most on the week due to their 1-week lagged base pricing, rising $27 & $29 per hog respectively. The Sig 4 rose $12/hog while values out of Ontario were up near $11/hog and the Hylife climbed shy of $8/hog. Quebec reported the greatest week-over-week decline, falling $16.50/hog. In the US, Tyson values were generally stable while JM fell near $2/hog from week ago levels.


Weekly Hog Margins

Most Canadian hog margins improved again this week and were further supported by reduced feed costs. Canadian farrow to finish feed costs fell $2.50/hog while those in the monitored US region were down near $1.50/hog from the previous week. 

Despite recent declines hog margins out of Quebec remain the strongest north of the border, weakening $14/hog to $84.25/hog profits. The OlyW 20 strengthened $29.50/hog to more than $29/hog profits, while Hylife improved near $10.50/hog to $22.50/hog profits and the Sig 4 strengthened $14.50/hog to $21/hog profits. Hog margins out of Ontario were the weakest overall on the Canadian side, improving $13.50/hog to nearly $15/hog profits. In the US, Tyson margins improved $2/hog to $30.50/hog losses while JM weakened $0.30/hog to $44/hog losses from week ago levels.

 US Regional Margins

  • Tyson: $ (30.49) USD X 1.4057 = $ (42.86) in Canadian Dollars
  • Morrell: $ (43.92) USD X 1.4057 = $ (61.74) in Canadian Dollars



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