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Market Commentary: Monday, January 25/21

Transcript

Hog futures are trading higher within a narrow trading range with most contracts unable to move out of the single digit gains. The underlying support in pork values and continued focus on further loss potential in grain markets seem to have buyers hovering on the sidelines. Limited trade volume is likely to be seen through most of the morning.

Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady to 50 cents higher. Prices are higher on the National morning report and the morning cutout value is lower. 

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

For the week ending Feb 5, the Western Hog Exchange OlyWest 20 weekly price is $1.494/kg dressed, the OlyWest 21 weekly price is $1.683/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange.

Weekly Regional HOG PRICE Report

 

Things to Consider….

The start of 2021 has brought about some expected pricing for parts of the hog industry while other areas of production have created some food for thought.

Small pig prices, namely isowean and feeder pig pricing as shown by the 2 upper graphs illustrate that as of the 4th week of January, prices are near or at historical averages for this time of year.  Cash isowean prices on the open market have approached $60 US which is common for the month of January as this weight category of small pigs are destined for the top priced summer markets.  Keep in mind, although cash isoweans appear very profitable at $60 US they are coming off the lows of below $10 US for a 4-month period from mid April to later July in 2020.  Seasonally, isowean price begin to decline this week and continue lower until late July.     This coincides with the 6-month out futures contracts and when isoweans go to market.

Feeder pig prices on the other hand are expected to continue trading higher for the next 2 months as a 40-pound feeder entering a finishing barn this week is destined to reach the early summer market which this week hit life of contract highs.  Seasonally, feeder pigs are trading similar to the 5-year average and are likely to follow the trends of 2019 and prior, while not following the devastating declines witnessed in 2020.

The major influence which is likely to cap the rally on both isowean and feeder pig prices is the escalating feed costs which have now entered the equation for 2021.   Higher corn and soymeal prices will limit the amount finishers are going to pay for small pigs unless covered by ongoing strength in hog prices.  






January 19, 2021


Weekly Hog Price Recap

Cash hogs varied throughout the week with regional cash reporting some mid-week strength while national cash was reported lower for most of the week. CME cash improved nearly every day, with greater rises early on. Wholesale pork primals varied, however improved values for hams, picnics and ribs helped pork cutout finish the week $1.49/cwt higher.  


Monitored hog markets improved on the week, generally $3-$8 per hog higher. The OlyW 21 improved shy of $8/hog, followed by values out of Quebec, Ontario and the OlyW 20 which were all up over $7/hog. The ML Sig 4 rose $5.75/hog, while BP/TC improved $4.50/hog and Hylife was up nearly $3/hog. In the US, Tyson & JM each rose $3/hog from week ago levels.



Weekly Hog Margins

Most monitored hog margins strengthened on the week with improved hog values tempered by another rise in feed costs. Canadian farrow-to-finish feed costs rose more than $3.75/hog while those in the monitored US region increased $3.25/hog from a week earlier.


Hog margins out of Quebec improved more than $3.75 on the week to $19.75/hog losses, while those out of Hylife weakened $1 to more than $21.75/hog losses. The OlyW 21 improved more than $1/hog to $26.75/losses while the OlyW 20 strengthened $3.50 to $30/hog losses and Sig 4 margins improved more than $1.75 to $31.50/losses. Ontario hog margins strengthened $3.50 to $36.25/hog losses. In the US, Tyson margins strengthened $0.25 to $31/hog losses while JM margins weakened $0.25 to more than $33.75/hog losses from a week earlier.

US Regional Margins

  • Tyson: $ -31.11 USD X 1.2725 = $ -39.59 in Canadian Dollars
  • Morrell $ -33.82 USD X 1.2725 = $ -43.04 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.