Market Commentary: Friday, February 23/24

Transcript

Hog futures are trading higher at midday with ongoing signs of increased demand coming back to the pork market. In the last six months of 2023, negotiated cash hog prices collapsed from over $100 to just below $44 and they trailed formula prices by as much as $21 at the end of the year. As of this morning, USDA reported negotiated cash hogs at $71.59. Packers are clearly more interested in bidding for negotiated supply than they were in late 2023 and that is a bullish sign of increased demand for hogs. Net sales of pork for 2024 were down 14% from the previous week and 17% from the prior 4-week average. The three largest increases were in Mexico, Japan, and Canada. So far in 2024, pork exports are up 10% from a year ago. Export Adjustment: Accumulated exports of pork were adjusted lower for China and Mexico for the week ended Feb. 8. These shipments were reported in error. 

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

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

For the week ending Feb 23, the Western Hog Exchange OlyWest 20 weekly price is $1.83/kg dressed, the OlyWest 21 weekly price is $2.01/kg dressed, and the BP4 price is $1.83/kg dressed. This is Kerrie Simpson reporting from the Western Hog Exchange

Weekly Regional HOG PRICE Report

Things to Consider….

In the latest data, Canadian stocks of frozen and chilled pork for the first quarter slipped 404 tonnes or -0.5% from the previous quarter, bringing the latest stocks 931 tonnes or -1.2% under year-ago supplies.
 
Pork trimmings increased the most from last reported, up 745 to 10,228 tonnes in the first quarter but 686 tonnes under last year.
 
Quarterly pork ribs were up 467 to 11,229 tonnes bringing the latest stocks 1,333 tonnes under Q1 2023.
 
Ham stocks increased 337 from the previous quarter to 9,545 tonnes and up 231 tonnes over a year earlier.
 
Pork butts rose 237 to 2,285 tonnes as of January however is 127 tonnes under last year.
 
Loins climbed 177 tonnes on the quarter to 5,519 tonnes in Q1, however is 825 tonnes under year-ago supplies.
 
Offsetting some of the earlier mentioned quarter-over-quarter increases were primarily reduced stocks of unclassified pork and more moderate reductions in pork back/shoulders, and bellies.
 
The category accounting for unclassified pork fell 1,505 in the latest quarter to 28,007 tonnes, a modest 92 tonnes over a year earlier.
 

Pork backs & shoulders dropped 567 to 1,887 tonnes for the first quarter of 2024, bringing them 33 tonnes under last year.
 
Belly stocks fell 276 to 4,785 tonnes, bringing current supplies 636 tonnes over year-ago supplies. 


  February 20, 2024

   


 



Weekly Hog Price Recap

Regional and national cash hogs improved much of the week, recording one day of mostly moderate declines mid-week. CME cash climbed higher daily however recorded more moderate moves compared to cash hogs. Wholesale pork primal values improved overall, excluding a modest -0.3% decline in bellies, supporting US pork cutout $2.40/cwt over the previous week.



Monitored hog markets were mixed to generally higher. BP4/TC4 was up shy of $5/hog, followed by hogs of out Hylife which climbed $4/hog. Ontario hogs improved $3/hog, while the OlyW 20 was up around $2.50/hog and the ML Sig 4 climbed $0.60/hog higher. Hogs out of Quebec slipped $0.50/hog while those off the OlyW 21 fell $1.30/hog. In the US, Tyson hogs improved $5.80/hog while JM hog values rose $7.75/hog from a week earlier.
 

Weekly Hog Margins

Monitored hog margins improved on better hog values overall and another reduction in feed costs. Canadian farrow-to-finish feed costs fell shy of $2/hog while those in the monitored US region declined $1.50/hog from a week earlier.

Hylife hog margins strengthened $6 to $1/hog profits on the week, while ML Sig 4 margins improved $2.50 to $0.60/hog losses. Ontario hog margins strengthened $4.85 to $4.55/hog losses while those out of Quebec recovered $1.45 to $7.25/hog losses. OlyW 20 hog margins strengthened $4.35 to $7.75/hog losses while those off the OlyW 21 improved $0.60 to $9.85/hog losses. In the US, Tyson hog margins strengthened $7.25 to $7.40/hog losses while JM margins strengthened $9.25 to $11/hog losses for the week.
 

US Regional Margins:

  • Tyson: $0.61 USD X 1.3507 = $0.82 in Canadian Dollars
  • Morrell: -$3.04 USD X 1.3507 =  -$4.11 in Canadian Dollars    


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