Market Commentary: Tuesday, January 31/23

Transcript

Hog futures are trading modestly lower at midday as traders focus on the cattle contracts. It is important to note that both cash prices and pork cutout values are higher at noon, which could potentially mean that the market's fundamentals stand a chance at closing higher as well.

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

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

For the week ending Feb 3, the Western Hog Exchange OlyWest 20 weekly price is $1.74/kg dressed, the OlyWest 21 weekly price is $1.89/kg dressed, and the BP4 price is $1.82/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

Things to Consider….

US federally inspected hog slaughter was reported at 2,531 thousand head: down -5.7% from a week earlier, +3.9% over the same week last year and +2.8% over last year-to-date. 

US sow slaughter for the week ending Jan 7th was up 7,700 head or +16.1% from the prior week to 55,700 head, which is -3.3% under last year. 

US pork production for the week fell -5.2% or 30.2 million pounds down to 550.7 million pounds in the holiday-shortened week, bringing overall production +3.1% over last year and +2.2% compared to last year-to-date. 

Weekly average barrow and gilt weights in the ISM reporting area for the week ending Jan 21st was reported at 289.1 lbs, down 0.9 of a pound or -0.3% from a week earlier and -0.8% under year ago levels. Year-to-date, hog weights are -0.5% under the same weeks in 2022.

Canadian federally inspected market hog slaughter for the week ending January 14th at 422.5 thousand head rose 71.9 thousand or +20.5% from the week previous (a holiday-shortened week), and was +4.0% over last year but -1.6% under last year-to-date. 

Canadian sow slaughter was reported at 2,107 head for the same week, rising +25.9% from the week previous. Compared to last year, Canadian sow slaughter is +43.3% over the same week last year (a holiday week) and is +21.9% over last year-to-date.

Canadian pork production numbers are estimates derived from current slaughter rates and an annual average Canadian slaughter hog weight. Based on the latest slaughter rates Canadian weekly pork production was up +20.5% on the week, but is -0.1% under year-ago levels and -5.5% under last year-to-date.

  January 24, 2023


 



Weekly Hog Price Recap

Cash hogs were generally lower throughout the week, with national cash recorded moderately mixed while regional cash declined daily. CME cash was also recorded steadily lower during the week. Wholesale pork primal values were again lower overall, excluding bellies and to a lesser degree hams, weighing US pork cutout $2.05/cwt under the previous week's average.



Market hog values recorded another round of significant declines, generally $5-$9 per hog lower from the week previous. Markets derived from lagged base pricing resulted in the great declines week over week. The OlyW 20 & 21 each fell $9.50/hog, while BP/TC was down $8.60/hog and market hogs out of Quebec were $8.25/hog lower. Remaining monitored Canadian markets were generally $5.25-$5.75/hog lower on the week. In the US, Tyson hog values fell $4.75/hog while JM was down $5.25/hog from the previous week. 

Weekly Hog Margins

Monitored hog margins weakened further on continued declines in hog and pork values and were additionally pressured by an increase in feed costs. Canadian farrow-to-finish feed costs rose more than $2/hog, while those in the monitored US region were up $1.45 from the previous week.

Hog margins off the ML Sig 4 were down $7.50 to $37.65/hog losses, followed by those out of the OlyW 20 which dropped $11.50 to $39/hog losses. Hylife margins weakened $7.40 to $41.60/hog losses, while the OlyW 21 fell $11.60 to $48.30/hog losses. Ontario hog margins weakened $7.75 to $51.75/hog losses, while those out of Quebec were $10.35 lower to $55.30/hog losses. In the US, Tyson weakened $6.25 to nearly $21.50/hog losses while JM was $6.75 lower to $30/hog losses for the week.
 

US Regional Margins

  • Tyson: -$21.43 USD X 1.3424 = -$28.77 in Canadian Dollars
  • Morrell: -$29.98 USD X 1.3424 = -$40.25 in Canadian Dollars                                                                             



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