Pig outlook: Lean hog bulls struggle to stabilize prices, China sow herd dips
Analyst Jim Wyckoff shares an update on the US futures market, USDA reports and global swine news
6 May 2022
3 minute read
By: The pig traders’ perspective: June lean hog futures gained late this week on a corrective bounce from sharp declines over the past two weeks and prospects for stronger retail pork demand as the summer grilling season nears. An outlook for lower hog numbers this summer is also price supportive. Still, cash fundamentals remain under pressure, with the CME lean hog index at mid-week seeing a fifth straight daily decline and a two-week low. Technical charts also remain overall bearish on a near-term basis, although prices are still oversold and could see some more upside corrective price action.
Latest US Department of Agriculture (USDA) reports, and other news
US pork exports sales down, beef up in latest week
USDA Thursday morning reported US pork net sales of 23,800 MT for 2022 were down 24 percent from the previous week and 13 percent from the prior 4-week average. Increases primarily for Mexico (11,300 MT, including decreases of 300 MT), South Korea
(3,700 MT, including decreases of 1,000 MT), Japan (3,400 MT, including decreases of 100 MT), Colombia (1,300 MT, including decreases of 200 MT), and Canada (900 MT, including decreases of 500 MT), were offset by reductions for Nicaragua (600 MT) and New Zealand (100 MT). Exports of 32,200 MT were up 8 percent from the previous week and from the prior 4-week average. The destinations were primarily to Mexico (15,600 MT), Japan (4,100 MT), China (3,600 MT), South Korea (2,600 MT), and Canada (1,500 MT).
US beef net sales of 14,600 MT for 2022 were up 28 percent from the previous week and 1 percent from the prior 4-week average. Increases were primarily for Japan (4,100 MT, including decreases of 600 MT), South Korea (3,200 MT, including decreases of 600 MT), Taiwan (1,800 MT, including decreases of 100 MT), China (1,600 MT, including decreases of 100 MT), and Canada (1,200 MT, including decreases of 100 MT). Total net sales of 100 MT for 2023 were reported for Japan. Exports of 20,300 MT were up 16 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Japan (6,600 MT), South Korea (5,000 MT), China (3,200 MT), Taiwan (1,300 MT), and Mexico (1,100 MT).
China’s sow herd declines
China’s sow herd declined 3.3% in March to 41.9 million head, down 3.1% from last year. China had 422.5 million head of hogs at the end of March, down 5.9% from the previous month but up 1.6% from last year, according to the country’s ag ministry.
The next week’s likely high-low price trading ranges:
June lean hog futures--$100.00 to $110.00, and with a sideways bias
July soybean meal futures--$410.00 to $440.00, and with a sideways bias
July corn futures--$7.80 to $8.24 1/2, and a sideways bias
Latest analytical daily charts lean hog, soybean meal and corn futures
