Pig outlook: Lean hog futures bulls see a glimmer of hope
Analyst Jim Wyckoff shares an update on the US futures market, USDA reports and global pig news
28 April 2023
3 minute read
By: June lean hog futures gave seen some price stabilization, including strong gains Wednesday. More solid price gains to end the week would be an early clue the hog market has bottomed out. The latest CME lean hog index is up 11 cents to $71.31 (as of April 25), marking consecutive days with modest gains. That’s the first back-to-back days with gains in six weeks. The futures rise came following Tuesday’s bearish monthly Cold Storage report from the USDA. Ending-March U.S. pork stocks at 533.9 million pounds were up about 12.7 million pounds from Feb. 28, despite the historical tendency for an 18.0-million-pound drawdown during March. The spring-summer outlook for the hog and pork markets could improve if grocers begin featuring pork more aggressively, especially as the grilling season is very close at hand.
Weekly USDA US beef, pork export sales
Beef: Net sales of 9,500 MT for 2023 were down 50 percent from the previous week and 28 percent from the prior 4-week average.
Increases were primarily for Japan (2,400 MT, including decreases of 400 MT), South Korea (2,200 MT, including decreases of 400 MT), Canada (1,600 MT, including decreases of 100 MT), Mexico (500 MT), and China (500 MT, including decreases of 1,300 MT). Exports of 16,000 MT were unchanged from the previous week, but down 3 percent from the prior 4-week average. The destinations were primarily to South Korea (4,100 MT), Japan (3,700 MT), China (3,000 MT), Mexico (1,300 MT), and Taiwan (1,300 MT).
Pork: Net sales of 54,000 MT for 2023--a marketing-year high--were up 50 percent from the previous week and 47 percent from the prior 4-week average. Increases primarily for Mexico (32,400 MT, including decreases of 300 MT), Japan (6,400 MT, including decreases of 3,100 MT), Canada (4,700 MT, including decreases of 400 MT), Colombia (3,100 MT), and China (1,700 MT, including decreases of 300 MT), were offset by reductions for Malaysia (100 MT) and Nicaragua (100 MT). Exports of 38,000 MT--a marketing-year high--were up 11 percent from the previous week and 12 percent from the prior 4-week average. The destinations were primarily to Mexico (14,600 MT), China (6,000 MT), South Korea (4,700 MT), Japan (4,100 MT), and Canada (1,500 MT)
Cargill signals it will take months to shift cleaning at meat plants
The head of Cargill’s meat business said Tuesday that it will take the company several months to cut ties with Packers Sanitation Services Inc. (PSSI) in the wake of PSSI paying $1.5 million in penalties to the U.S. Department of Labor for employing more than 100 teenagers in dangerous jobs at meat packing plants. “We made the decision to terminate the agreements with PSSI,” Hans Kabat told Reuters in an interview. “It’s really important to understand that that will take time.”
Cargill notified PSSI in March it was ending the use of its services at the Dodge City, Kansas, plant and then ended all contracts with the firm. "It will be a while to get the remaining facilities out," Kabat said. "These are challenging issues, and we want to make sure that we understand fully how to manage that —g etting the plants cleaned, keeping people safe and still making sure that requirements around employment and age verification are all 100%."
Other meat packers such as JBS USA have also ended contracts with PSSI in the wake of the labor revelations.
The next week’s likely high-low price trading ranges:
June lean hog futures--$84.625 to $95.00 and with a sideways bias
July soybean meal futures--$410.00 to $440.00, and with a sideways-lower bias
July corn futures--$5.75 to $6.10 and a sideways-lower bias
Latest analytical daily charts lean hog, soybean meal and corn futures
