6 May 2024

2 minute read

By: Jim Wyckoff

South America

North America

June lean hog futures prices this week dropped to a four-week low. Technical damage has been inflicted to now suggest a market top is in place, and that more price downside is likely in the near term. Fundamentally, the latest CME lean hog index is up 34 cents to $90.60 as of April 30, ending a four-day decline. Lean hog futures traders will keep a close eye on the cash market, as the selloff over the past week has removed much of the premium in both May and June futures. The cattle futures market continues to face risk-off selling pressure over worries surrounding H5N1 and the potential impact to beef demand. If consumers reduce their beef consumption, a large portion of that demand is likely to shift to pork.

Weekly USDA US pork export sales

Pork: Net US sales of 33,600 MT for 2024 were up 17 percent from the previous week and 6 percent from the prior 4-week average. Increases were primarily for Mexico (21,600 MT, including decreases of 400 MT), Japan (4,200 MT, including decreases of 200 MT), Canada (1,300 MT, including decreases of 600 MT), Colombia (1,100 MT, including decreases of 100 MT), and South Korea (900 MT, including decreases of 100 MT). Exports of 36,200 MT were down 10 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Mexico (14,200 MT), South Korea (5,300 MT), Japan (4,800 MT), China (3,600 MT), and Canada (1,900 MT).

Brazil rains disrupt meat processing in key southern state - industry group

Heavy rains and flooding in Brazil's southernmost state of Rio Grande do Sul have reduced or paralysed chicken and pork slaughtering at multiple meatpacking facilities, Reuters reported, citing industry groups on Friday. Global meat companies including JBS SA and BRF SA operate in the region, where entire towns have submerged and roads were totally or partially blocked by the unprecedented downpours. Some 12 chicken processors were affected, Jose Santos, head of a local poultry lobby, said. Five pork processors have been impacted by lack of animals for slaughtering and dwindling animal feed stocks, said Rogerio Kerber, head of a lobby group representing producers, referring to disruptions in the heavily hit Taquari river valley. Rio Grande do Sul is one of Brazil's largest chicken and pork producers and exporters.

The next week’s likely high-low price trading ranges:

June lean hog futures--$98.625 to 105.00 and with a sideways-lower bias

July soybean meal futures--$341.50 to $365.00, and with a sideways-higher bias

July corn futures--$4.43 3/4 to $4.65 and a sideways-higher bias

Latest analytical daily charts lean hog, soybean meal and corn futures