Market Commentary: Wednesday, March 22/23


Hog futures are trading lower as the market has yet to find any substantial support to finally put a bottom in the market's downturn. Depending on what the US Federal Reserve decides to do with interest rates, the hog market could continue to trade lower or, if the market reacts poorly to their decision, new pressure could send the market even lower.

Cash hog prices on the National morning report are unreported, the morning cutout values are lower.

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

For the week ending Mar 24, the Western Hog Exchange OlyWest 20 weekly price is $1.96/kg dressed, the OlyWest 21 weekly price is $2.09/kg dressed, and the BP4 price is $2.03/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

Things to Consider…

All North American Hogs and Pigs were reported at 87.0 million head, up 835 thousand head or +1.0% from the previous report however were 1.6 million head or -1.8% under year ago levels. Canadian All Hogs and Pigs edged +0.2% higher on the latest report to 13,930 thousand head, which brings them 240 thousand head or -1.7% under last year.

North American Market hogs increased 850 thousand to 79.6 million head, up +1.1% from last reported and brings the current market hog inventory 1.6 million head or -2.0% under year-ago levels. Canadian market hog inventories are 230 thousand head or -1.8% lower than the year previous.

The North American Breeding herd slipped 14 thousand head under the inventories last reported in August for the Q1/Q2 2022 period, bringing the latest reporting period 19 thousand head or +0.3% over Q3/Q4 of 2021. Canada's breeding herd recorded no change from previously reported, however the current inventory is 10 thousand head or -0.8% under the year previous.

US & Canadian sows farrowed were reported +1.7% or 118 thousand head higher than the previously reported tally, however came in -1.4% or 102 thousand head under last year. The pig crop rose +3.0% from Q1/Q2 2022 period however fell -1.3% from year-ago levels. Sows farrowed in Canada fell 12 thousand head or -1.0% from last reported and is 20 thousand head or -1.6% under last year. Canada's pig crop was recorded -1.4% lower; 202 thousand head lower than previous reported and 215 thousand head under last year.

The slight reduction in overall numbers confirms little to no expansion due in part to higher then expected feed costs over the last 18 months implying ongoing slaughter levels similar or lower to 2022.

March 14, 2023

Weekly Hog Price Recap

Regional and national cash hogs were lower overall however rises recorded mid-week helped prices finish largely unchanged from the week previous. CME cash moved more modestly however climbed daily. All wholesale pork primal values improved, generally recording 2%-3% rises, supporting US pork cutout $2.21/cwt over the previous week's average.

Monitored hog markets were generally $3-$4 per hog higher on the week. Hog values out of Ontario and BP/TC were each up around $4.25/hog, followed by Quebec hogs which were up shy of $4/hog. The OlyW 20 increased closer to $3.50/hog, while the ML Sig 4 and Hylife each rose $3/hog and the OlyW 21 climbed $2/hog. In the US, Tyson hogs were up $1/hog while JM was nearly unchanged from the previous week.

Weekly Hog Margins

Monitored margins improved on higher hog and pork values, in addition to a reduction in feed costs. Canadian farrow-to-finish feed costs were generally stable to a modest $0.15/hog lower, while those in the monitored US region fell $1.25/hog from the previous week.

Hog margins out of Quebec strengthened $4 to $1.50/hog losses, while margins out of the ML Sig 4 & Hylife each improved around $3 to near $10.75 & $13.25 per hog losses, respectively. OlyW 20 margins improved $3.50 to $17.25/hog losses, while Ontario strengthened $4.45 to $19/hog losses & OlyW 21 hog margins climbed $2.15 to $28.30/hog losses. In the US, Tyson margins strengthened $2.25 to shy of $2/hog losses while JM improved $1.30 to nearly $7/hog losses for the week.

   US Regional Margins  –    Tyson -$1.90 USD X 1.3743 = -$2.61 in Canadian Dollars
                                          Morrell -$6.95 USD X 1.3743 = -$9.55 in Canadian Dollars                             

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