Pig outlook: Lean hog futures bears reassert dominance
Livestock analyst Jim Wyckoff reports on global pig news
13 July 2024
3 minute read
By: August lean hog futures this week careened to a new contract low as the technical posture of the market has turned fully bearish again. That suggests more downside price pressure in the near term. The latest CME lean hog index is up 24 cents to $88.67 as of July 9. August hog futures extended their discount to the cash index to $3.995. That’s also a bearish signal that traders are not optimistic about the hog market this summer. Traders are betting that seasonal price weakness is likely to continue. Tepid consumer demand amid higher pork prices at the meat counter are unlikely to bring any late-summer strength to the hog market.
Weekly USDA pork export sales
Pork: Net US sales of 26,500 MT for 2024 were down 55 percent from the previous week and 29 percent from the prior 4-week average. Increases were primarily for Mexico (9,000 MT, including decreases of 200 MT), Japan (6,400 MT, including decreases of 100 MT), China (3,400 MT, including decreases of 100 MT), Colombia (1,700 MT, including decreases of 100 MT), and South Korea (1,700 MT, including decreases of 100 MT). Exports of 32,400 MT were up 8 percent from the previous week and from the prior 4-week average. The destinations were primarily to Mexico (14,100 MT), China (4,300 MT), Japan (3,400 MT), South Korea (2,500 MT), and Canada (2,200 MT).
US pork exports slow during May
The US exported 258.9 million lbs. of beef during May, down 589,000 lbs. (0.2%) from April and 7.8 million lbs. (2.9%) less than last year. Pork exports totaled 584.7 million lbs., down 71.2 million lbs. (10.9%) from April and 35.0 million lbs. (5.7%) less than last year. According to the U.S. Meat Export Federation, the value of beef exports totaled $902.4 million in May, the highest since June 2023, while the value of May pork exports at $715.8 million fell 2%. Through the first five months of the year, beef exports totaled 1.251 billion lbs., down 64.5 million lbs. (4.9%) from the same period last year. Pork shipments through May reached 3.043 billion lbs., up 171.0 million lbs. (6.0%) versus the first five months of 2023.
China’s sow herd declines, slaughter builds
China’s sow herd totaled 39.96 million head at the end of May, according to the ag ministry, down 6.2% from last year. Hog slaughter during the first five months of the year rose 0.8% to 136.04 million head.
The next week’s likely high-low price trading ranges:
August lean hog futures--$82.00 to 88.30 and with a sideways-lower bias
September soybean meal futures--$310.00 to $332.00, and with a sideways-lower bias
December corn futures--$4.00 to $4.25 and a sideways bias
Latest analytical daily charts lean hog, soybean meal and corn futures
