Things to Consider….

The Quarterly Hogs & Pigs report was released Thursday, December 23rd. The latest NASS/USDA report indicated a -4% decrease or 3.1 million head reduction in All Hogs & Pigs compared to last year, with the category for market hogs down

-4.4% and the breeding herd up +0.1% for the December quarter. Pre-report estimates by market analysts expected both market hogs and the breeding herd to be higher than the actuals released on the latest report.

     All Hogs & Pigs declined 416 thousand head or -0.6% from the previous quarter, where market hog inventories were down 406 thousand head or -0.6% while the breeding herd slipped 10 thousand head or -0.2% from the September report.

     Pigs per litter reported a +1.3% climb from last December where the market anticipated no change, while the pig crop declined -3.6% from last year which was lower than expected by pre-report estimates.

Revisions, as stated on the report: 

All inventory and pig crop estimates for December 2019 through September 2021 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. The revision made to the September 2021 all hogs and pigs inventory was 1.0 percent. The net revision made to the June 2021 all hogs and pigs inventory was 3.3 percent. A net revision of 1.0 percent was made to the March-May 2021 pig crop. The net revision made to the March 2021 all hogs and pigs inventory was 1.1 percent. A net revision of 3.6 percent was made to the December 2020-February 2021 pig crop. The net revision made to the December 2020 all hogs and pigs inventory was 0.2 percent. A net revision slightly upward was made to the September-November 2020 pig crop. The net revision made to the September 2020 all hogs and pigs inventory was 1.3 percent. The net revision made to the June 2020 all hogs and pigs inventory was 2.5 percent. A net revision of 0.9 percent was made to the March-May 2020 pig crop. The net revision made to the March 2020 all hogs and pigs inventory was 3.2 percent. A net revision of 0.8 percent was made to the December 2019-February 2020 pig crop. The net revision made to the December 2019 all hogs and pigs inventory was 0.7 percent. A net revision of 4.3 percent was made to the September-November 2019 pig crop.

 Lean hog futures and Canadian forward contracting prices have moved to new highs because of the latest USDA Hogs and Pigs report.  Producers are encouraged to be patient as markets continue to react positively to the reduced supply expectations for 2022.

  December 21, 2021

Weekly Hog Price Recap

Cash hogs varied however recorded significant late-week declines, with national cash up for the better part of the week while regional cash started the week lower after going unreported the Friday previous. CME cash recorded more modest moves and managed to finish the week higher. Wholesale pork values improved overall with good gains recorded mid-week, however bellies finished the week lower. US pork cutout was $1.85/cwt over the previous week's average.

Hog values out of Hylife were up the most on the week, rising $5.25/hog, followed by those out of Ontario, the ML Sig 4 and Quebec which were up $4.75-$4.25/hog. Markets derived from lagged base pricing were generally lower, with BP/TC down $0.75/hog while the OlyW 21 edged $0.25/hog lower and the OlyW 20 was stable. In the US, hog values out of Tyson improved $2.50/hog while JM fell $4.25/hog from week ago levels. 

Weekly Hog Margins

Canadian hog margins generally strengthened on the week, however support from improved cash hog values were tempered by a rise in feed costs. Canadian farrow-to-finish feed costs rose more than $1.75/hog, while those in the monitored US region were up $0.75/hog from a week earlier.

Hog margins out of Ontario strengthened $3 to $15.75/hog losses, while the Sig 4 improved $2.75 to $11.75/hog losses. The OlyW 21 weakened $2 to $10.75/hog losses while the OlyW 20 declined more than $1.75 to shy of $10.25/hog losses. Hylife fell strengthened $3.25 to $3.75/hog losses while margins out of Quebec improved $2.50 to $3.50/hog losses. In the US, Tyson margins strengthened more than $1.75 to $11.75/hog losses while JM weakened $5 to $19/hog losses from the previous week.
 

US Regional Margins

• Tyson: $ (11.71) USD X 1.2831 = $ (15.03) in Canadian Dollars
• Morrell: $ (18.93) USD X 1.2831 = $ (24.29) 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.