Analysis: Hogs & Pork

US Feeder Cattle and Hog Imports

Nov 17, 2:07 pm | Cattle, Hogs & Pork

Despite a larger US cow herd and inventory of feeder cattle, feeder cattle prices have generally been above last year since May, with the cash feeder index this week at $158 versus $120 a year ago. Higher prices have not only benefitted the US cow/calf producers, but have also helped out other North American producers. Cumulative feeder cattle imports from Mexico through early October are up 28% from a year ago and total just under 885,000 head.   While imports of Mexican cattle have increased over last year, imports of Canadian cattle continue to decline. The latest trade data shows YTD imports from Canada are just short of 108,000 head, and are down 35% at a 6 year low. Volatility…

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Hogs Close Mixed On Friday, Lower For The Week

Nov 17, 1:42 pm | Hogs & Pork

It was sharply mixed day of trade to end the week. February hogs initially found support under major moving averages and were $1.50 higher at midday, however the market could not hold on to early gains and was back towards unchanged by the close. The CME’s lean hog index was down $.40 at $65.67 for the third consecutive weekly decline.   The price for weaned pig in the spot market bottomed in August and has since mounted a fairly typical seasonal recovery, with Autumn quotes holding well above last year, but still short of the 5 year average. However, the market has started to stall as forward margins have turned down on weaker spring hog futures prices. The USDA this…

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Liquidation Keeps Hogs Lower Through Thursday

Nov 16, 4:49 pm | Hogs & Pork

Following a weaker start to the day, hog futures continued down on fund liquidation. December gave back all of the mid week gains, while February hogs stopped just above the contract’s 200 day moving average.     The chart shows the latest USDA forecasts for quarterly pork production for the 4th quarter of this year, and for all 4 quarters of 2018. Note that the last industry slow down was in 2014, which was caused by the PEDs outbreak. Since then the industry has adapted to and managed around the disease, and on track for the 4th consecutive year of expansion. The last period of industry contraction began in the 1st quarter of 2008 and ended in the 1st quarter…

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Hogs Close Mixed On Nearby Strength

Nov 15, 3:52 pm | Hogs & Pork

Hog futures traded and closed sharply mixed at midweek, with December falling to new lows early in the day before close more than $1 higher. February found good support around major moving averages, and was back near unchanged by the afternoon close, while the rest of the hog market settled lower. The CME’s lean hog index was down $.32 at $66.68, and projected another $.30 lower for Thursday.   Hog slaughter through Wednesday totaled 1.394 Mil head, up 9,000 head from a week ago and 6% more than last year.   The chart shows spot hog prices over the last 3 years, and also plots CME futures through next August. Note that after this week’s break, the CME is pricing…

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Hogs Fall In Technical Trade

Nov 14, 2:30 pm | Hogs & Pork

Hog futures were under pressure right from the open on Tuesday, and steadily traded lower all day. At the close December and February contracts were off more than $2 each, while the rest of the market was down more than $1. The hog index was down $.47 at $67 and projected another $.32 lower for Wednesday.   The latest update on hog producer returns from IA State University show improved profits in the farrow to wean business, and smaller losses in wean to finish operations during the month of October. Weaned pig producer margins were estimated at $5.39/head, the best since March and nearly $13/head more than a year ago when producers lost more than $7/head. In the finishing industry,…

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Hogs Start The Week Lightly Mixed

Nov 13, 4:38 pm | Hogs & Pork

Hog futures were back and forth at the start of the week, but finished little changed as neither rallies or breaks were able to get much traction. The cash hog market continues to trade softer as packers try to widen out margins. The hog index was down $.47 at $67.47, and the weekend slaughter data indicates another $.48 lower for Tuesday.   Packers killed just short of 2.5 million hogs last week, and the load count for this week on Monday was near unchanged from last week. We expect this week’s kill will be around 2.5 million, however next week is a holiday week and they may try to pull supplies forward ahead of the holiday.   June hogs stopped…

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November WASDE Livestock Price Forecasts

Nov 13, 3:19 pm | Cattle, Hogs & Pork

The November WASDE report featured modest changes to pork production and price forecasts for 2018, and no significant adjustments are expected until the January report when the December inventory data will be available. For the 2nd quarter of year, the USDA estimates pork production at 6,390 million pounds, a 4% increase over 2017 and the largest 2nd quarter production figure on record. This will also mark the 8th consecutive year of industry expansion for the quarter. The USDA’s price forecast for the quarter was also unchanged from October at $47-51 live, or down nearly $3 from 2017. CME hog futures on the other hand are still more optimistic, and this week are offering producers a 2nd quarter average live price…

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Hogs Closed Mixed With December Down on Large Nearby Supplies

Nov 10, 3:56 pm | Hogs & Pork

Nearby December hogs closed with $.70 losses at $62.475, while back months closed stronger as funds rolled their long positions forward. It’s noteworthy in the meats that fund managers show no intent on reducing their large net long positions, even when they have to roll to higher priced back month futures.      If and when funds decide to exit net market length, a sharp price decline will follow. The risk of such a decline increases heading into late year.   The US pork cutout rose $.60/cwt on a carcass basis to with bellies rising another $1.85/cwt to $123.81. Hams were up $2.80 to $72.61 on seasonal demand for Christmas. A top in the US hog cutout should form right…

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Hogs End Lower on Sinking Feed Costs, Likely US Herd Expansion

Nov 9, 4:49 pm | Hogs & Pork

Hogs were under pressure on Thursday, but were able to close mixed with funds offering support late in the day. February hog futures closed at $70.22, up $.475 as futures caught support against the old highs at $69.00. A drop below $69.00 basis February would signify a deeper correction of the recent rally. ARC Research continues to point that hogs have scored a seasonal top in their rally to $73.00 basis February futures.    The US pork cutout rose $.65/cwt on a carcass basis to with bellies rising another $3.59/cwt to $121.96. The belly market continues to rise on rumored strong demand from retailers. Bellies are now up more than 30% from their September lows. The rise in belly prices…

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Hogs End Lower In Technical Trade

Nov 8, 4:33 pm | Hogs & Pork

Hogs were under pressure right from the open on Wednesday, and remained weak into late in the day with February marking the largest decline of just over $1.     After falling back under last year’s seasonal low in late September, the pork belly value has turned higher over the last several weeks. Wednesday quoted price of $118.37 was up $4 from last week and $29 over the September low. With the market now turning higher, there is not too many technical targets to choose from on the chart. Note that a year ago, confirmation of a seasonal low was followed by a more than $80 rally that lasted into early February. Supply has been large on big hog kills,…

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