Market Commentary: Friday, June 11/21

Transcript

Hog futures trading lower at midday in spite of positive fundamentals and a lack of hogs. Due to continuing demand, packers are actively looking for hogs and it's apparent in the market's cash spread that finding market-ready hogs in some regions is far harder than in others. Traders will most likely let the market float throughout the rest of today and will look to the beginning of next week to set the market's tone.

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

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

For the week ending June 11, the Western Hog Exchange OlyWest 20 weekly price is $2.52/kg dressed, the OlyWest 21 weekly price is $2.62/kg dressed, and the BP4 price is $2.39/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange.

Weekly Regional HOG PRICE Report

 

Things to Consider….

The latest US Cold Storage report reflected an overall increase in pork volume from the levels recorded for March, as the seasonal climb in hams offset declines in most other pork categories. 

US Cold Storage reported pork stocks at 455.3 million pounds for April, up +0.9% or 4.2 million pounds higher than previously reported with current levels 156.0 million pounds or -25.5% under last year. For reference, total pork in cold storage for March was revised lower from 451.8 to 451.0 million pounds. 

Total hams jumped 20.5 million pounds or +33.8% from last reported in a seasonal move however current stocks are 32.0 million pounds or -28.3% under year ago levels. Typically, hams in cold storage start to increase seasonally in April and continue trending higher to peak in September. 

Trimmings in cold storage climbed 1.2 million pounds or +2.9% from March, but is 15.6 million pounds or -27.3% under year ago levels. Picnics in cold storage were 237 thousand pounds lower for April, with current stocks -3.1% under March levels and -45.5% or 6.1 million pounds under last year. Bellies were down 1.2 million pounds or -3.4% for April, bringing current stocks -57.6% or 46.5 million pounds under last year with April 2020 representing nearly a 7-year high for monthly bellies in cold storage.

Total loins in cold storage were 1.4 million pounds lower or -2.9% lower for April, with the bone-in variety lower while the boneless variety increased moderately. This brings total loins 5.7 million pounds or 14.2% over year ago levels, and considerably high for this time historically.Butts declined 3.6 million pounds or -20.0% from March, and 11.9 million pounds or-44.9% under last year.

Overall as indicated by the historical graph, total stocks remain at the lowest level in over a decade.    Only in 2010 were pork stocks lower then what the market has seen over the last few months.  With expectations of supplies to continue on the short side throughout the summer months, cash continues to provide the greatest opportunity for producers in the second and third quarter of 2021.

  May 25, 2021



Weekly Hog Price Recap

Regional and national cash hogs declined throughout the week with greater declines recorded mid-week, while CME cash began the week with moderate gains however pulled back some during the latter part of the week. Wholesale pork values improved overall, once again excluding hams, with strength in primals helping support pork cutout $3.67/cwt over the previous week.  



Canadian market hog values improved overall with those out of Quebec and the OlyW 21 up the most, each rising $2.50/hog from the week previous. BP/TC increased $2.25/hog, while the Sig 4 was up $2/hog and the OlyW 20 improved $1.50/hog. Hog values out of Ontario were up $1/hog while Hylife was up more modestly, rising more than $0.25/hog. In the US, Tyson dropped nearly $8/hog while JM fell $7.75/hog from the previous week.

Weekly Hog Margins

Canadian hog margins improved significantly this past week, with the greatest support derived from a reduction in feed costs. Canadian farrow-to-finish feed costs declined nearly $6.50/hog while those in the monitored US region fell $5.50/hog from week earlier.

Hog margins out of the OlyW 20 were up $7.75 to $86/hog profits, followed by margins out of Ontario which strengthened $7.50 to $76.25/hog profits and Quebec which increased $8.75 to nearly $74.25/hog profits. ML Sig 4 margins rose $8.50 to $63/hog profits while Hylife was up $6.75 to $58.75/hog profits and the OlyW 21 was up $8.75 to more than $56/hog profits. In the US, Tyson hog margins weakened $1.75 to $99.50/hog profits while JM margins declined $2.25 to more than $98.50/hog profits from a week earlier.

US Regional Margins

  • Tyson: $ 99.43 USD X 1.2073 = $ 120.04 in Canadian Dollars
  • Morrell $ 98.61 USD X 1.2073 = $ 119.05 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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