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Market Commentary: Wednesday, June 20/18

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Hog futures are trading sharply lower with all nearby contracts holding $2 to $3 per cwt losses. This pressure has pushed August futures limit lower with a $3 per cwt loss and further weakened overall market activity in all contracts. If markets close at these levels, expanded trading limits will be possible Thursday, potentially adding to the market volatility across all hog markets. The overall pressure in the complex is causing, not only pressure in futures trade, but also is likely to limit any support through the cash and wholesale pork complex.

Cash hog trade is called steady to $2 per cwt lower; most bids are $1 lower. Cash prices are lower on the National and on the Iowa Minnesota morning reports. The cutout value is higher.

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

For Wednesday, June 20, the Western Hog Exchange OlyWest price is $1.970/kg dressed and the OlyWest plus price is $1.980/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…. Conflicting news and fundamentals had lean hog futures on both sides of the board over the past week.As projected in last weeks article, one simple announcement was able to derail the gains seen in the market so far this month.As of late last week, US President Trump threatened more tariffs on China, this time looking to impose 10% tariffs on as much as $200 Billion worth of Chinese goods.Concerns over the current trade war have pork traders and exporters on high alert with projections of lower total volume abroad impacting future values.Those lower projections however have yet to show up in the data with recent ERS export data reporting a new record high. US livestock and meat trade data reported April pork exports at 547,931 thousand pounds, which represents a new historical high for pork volume traded ever for the US.This brings total pork exports 168.7 million pounds over last year-to-date. The 9.8-million-pound rise in total US pork exports for April can be attributed to a significant rise in US pork exported to Mexico.Volume to Mexico also reached a historical high on the latest report.The increase to Mexico alone offset declines to other major destinations for US pork. Exports to Mexico surged 32.1 million pounds for April, at a time when seasonally they tend to import less pork from the US.China* was the only other major destination to increase their imports of US pork, rising 4.9 million pounds from last reported. Although available trade data is supportive to the market, analysts are projecting a sharp decline in the tonnage moving during the summer months and into the highly populated 4^th quarter of 2018. Hog producers need to consider the potential decline in exports a serious threat to pricing later this year and consider some price protection of around 50% of production. Continuing the positive side of the equation, hog weights have slipped to the lowest level in 5 years contributing to lower pounds of pork on a weekly basis which has been supportive to cash.Reduced cash a month ago, higher feed costs along with some warm temperature all combined to see a reduction in live weights.Producers are encouraged to take advantage of strong cash price by staying current with marketing and keeping weights down.		June 19, 2018
Weekly Hog Price Recap Cash hog pricing surged on the week with significant rises reported each day. National and regional pricing rose $1.25-$2/cwt daily except Friday which was up near $0.20/cwt regionally and $1/cwt nationally. CME cash was up $1.25-$1.50/cwt daily. Bid volume was consistently moderate throughout the week, peaking Wednesday.
Monitored markets improved greatly this week on the strong gains made in cash hog values. Canadian markets received additional support from significant strength in the rate of exchange.Markets based off regional cash pricing rose the most on the week, with the WHE 2010 and the Sig 3 surging near $20/hog. Other markets based on similar regional/national markets such as the WHE 2017, the Sig 5 and pricing out of Ontario rose $16-$17/hog. Other Canadian markets generally based off CME case rose $12-$14/hog except for pricing out of Thunder Creek which was up $9/hog. Monitored US markets rose $16-$17/hog on the week.
Weekly Hog Margins Feed costs were supportive to hog margins, with Canadian farrow to finish feed costs down near $1.75/hog while costs south of the border declined closer to $1.50/hog. Monitored margins received the majority of their week-over-week strength from the significant rises in hog pricing. Hog margins calculated out of Ontario improved the most this week, surging shy of $20/hog. This was followed by the Sig 5 which improved $19/hog and the WHE 2017 up $18/hog. Other Canadian margins were $14-$16/hog stronger from last calculated. US hog margins were $17-$18/hog stronger. US Regional Margins - Tyson $38.49USD X 1.3043 = $50.20 in Canadian Dollars - Morrell $44.10USD X 1.3043 = $57.52 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.

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Weekly Regional HOG PRICE Report

	Weekly Regional HOG PRICE Report
Things to Consider…. It has been a rewarding week for hog margins with both cash hogs and futures moving higher while feed costs appear to have reached a short-term top moving lower for the last couple of weeks on crop condition ratings and stock numbers. Nearby July hogs and deferred contracts reached their highest level since mid-April.Regional cash markets were also strong over the past week gaining $5 per cwt or close to $10 per hog.US cash markets have reached the highest level since August 30, 2017, nearly 10 months ago, with more upside expected in the months ahead. The latest round of negotiations between the US and China over tariffs and trade deals has been positive however nothing is certain in that market.As we have seen over the last 3 months, positive news can turn to negative news in as quickly as one tweet. The Canadian dollar has also helped bolster hog returns with the Loonie trading around 77.00 cents US which is at the lower end of the last 4-month trading range. Hog producers should now begin to look at coverage for the 4^th quarter of 2018 and the first quarter of 2019.Oct 18, Dec 18 and Feb 19 are within $2-4 US per cwt of previously set highs set back in Feb of this year.With large hog numbers expected this fall and continued uncertainty over trade, some protection is warranted.Starting with 25% coverage will allow for producers to continue to add on further potential upside.		June 12, 2018
Weekly Hog Price Recap Cash hog pricing surged on the week with significant rises reported each day. National and regional pricing rose $1.50-$2/cwt daily while CME cash was up $0.75-$1/cwt daily. Bid volume was consistently moderate throughout the week. Increased retail demand and hot weather slowing hogs to market help support stronger bids.
Monitored markets improved greatly this week on the strong gains made in cash hog values. Canadian markets based off regional pricing improved the most with the WHE 2010 and ML Sig 3 up more than $13/hog while the WHE 2017 and Sig 5 rose shy of $10/hog. ML Sig 4 and pricing out of Thunder Creek and Quebec rose near $5/hog, while other CME based pricing rose $7-$8/hog. In the US, Tyson pricing rose $8/hog while JM surged $12/hog.
Weekly Hog Margins Feed costs were supportive to hog margins, with Canadian farrow to finish feed costs down $2-$2.50/hog while costs south of the border declined near $2/hog. Monitored hog margins based off the WHE, Sig 5 and Ontario pricing rose $11.50-$12.50/hog. Margins out of Hylife rose shy of $10/hog while remaining hog margins rose $7-$8/hog. Tyson margins improved more than $9/hog while JM margins surged $14/hog. US Regional Margins - Tyson $19.69USD X 1.2954 = $25.51 in Canadian Dollars - Morrell $26.68USD X 1.2954 = $34.56 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.