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Market Commentary: Wednesday, June 20/18

Transcript

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 4th 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.





Reach tor the Top Winners

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 4th 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.