Pig outlook: Lean hog futures bulls work to keep price uptrend alive, Australian pork production forecast to rise
Livestock analyst Jim Wyckoff reports on this weeks market and global pig news
22 March 2024
3 minute read
By: The April lean hog futures market is still in a nearly three-month-old uptrend on the daily bar chart, but the bulls need to show more power soon to keep it alive. Fundamentally, the latest CME lean hog index is up another 39 cents to $83.21 as of March 19 and has now firmed $18.16 from the seasonal low posted at the beginning of the year. An early start to the US grilling season and relatively tight pork belly stocks are likely to support wholesale pork this spring and into summer. As inflation continues to weigh heavily on consumers and beef prices are high, grocers are likely to actively feature pork as an alternative to beef, keeping demand for pork high and underpinning the hog market.
Weekly USDA US pork export sales
Pork: Net US sales of 33,800 MT for 2024 were up 36 percent from the previous week and 10 percent from the prior 4-week average. Increases were primarily for Mexico (9,200 MT, including decreases of 500 MT), Canada (8,900 MT, including decreases of 600 MT), Japan (5,500 MT, including decreases of 400 MT), South Korea (1,900 MT, including decreases of 700 MT), and Vietnam (1,600 MT). Exports of 32,100 MT were down 7 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to Mexico (11,200 MT), South Korea (5,000 MT), Japan (4,700 MT), China (3,000 MT), and Canada (1,900 MT).
USDA report on Australian livestock sector
The Australian pork industry is forecast to continue its momentum of rising production in 2024. The prospect of softening feed grain prices during 2024, along with firm pork prices, is anticipated to encourage a further production boost. Much of the increased production is forecast to boost domestic consumption, while imports and exports are expected to remain relatively flat in 2024. The living cost pressures experienced in Australia over recent years show signs of moderating after wage growth matched a declining inflation rate at the end of 2023. With this, the per capita consumption of pork is anticipated to remain stable, and the growth in overall consumption is driven by the rising Australian population
China’s pork imports slump to start 2024
China imported 160,000 MT of pork during the first two months of this year, down 56.7% from the same period last year. The sharp drop in imports comes as China’s pork production reached the highest level since 2014 last year.
USDA Livestock Outlook: March 2024
Pork/Hogs: The first-quarter commercial pork production is raised 30 million pounds to 7.2 billion pounds on higher-than-expected February production. Total 2024 commercial pork production is expected to be 27.9 billion pounds, up 2.2 percent from a year ago. Live equivalent prices of 51-52 percent lean hogs are forecast to average about $61 per cwt, 3.7 percent above prices in 2023. Pork exports for 2024 are raised 50 million pounds on strong demand from major importing countries and weakening competitiveness of EU pork due to lower production and higher prices. Total 2024 pork exports are expected to be 7.1 billion pounds, 4.6 percent above year-ago shipments.
The next week’s likely high-low price trading ranges:
April lean hog futures--$83.15 to $88.90 and with a sideways-higher bias
May soybean meal futures--$329.30 to $360.00, and with a sideways-higher bias
May corn futures--$4.31 3/4 to $4.60 and a sideways-higher bias
Latest analytical daily charts lean hog, soybean meal and corn futures
