Pig outlook - Lean hog futures bulls work to stabilize market
Livestock analyst Jim Wyckoff reports on global pig news
5 July 2024
2 minute read
By: August lean hog futures prices have been trading sideways for more than two weeks, which the bulls hope is “basing” action that puts in a market bottom. Fundamentally, the US wholesale pork market remains weak. The pork cutout value has dropped amid weaker retailer demand for pork and abundant supplies are causing packers to reduce wholesale prices. The national direct five-day rolling average cash hog price quote today is $89.16. Still, the short-covering rebound in futures could continue as seasonal lows in hog slaughter and pork production tend to occur at this time of year. However, the early-summer pork shortage may be mitigated by the 2% annual increase in early-summer hog supplies as indicated in last week’s USDA quarterly Hogs and Pigs report. A sustained price advance in hogs would probably have to come from stronger consumer demand. But with retailers continuing to feature beef in the meat case, they’re also keeping retail pork prices at elevated levels and discouraging consumer demand.
Latest USDA and other news regarding the global pork industry
USDA hogs and pigs report: hog herd expands more than expected
USDA’s Hogs & Pigs Report estimated the June 1 U.S. hog herd at 74.486 million head, up 935,000 head (1.3%) from year-ago and 347,000 head than the average pre-report estimate implied. The breeding herd declined 198,000 head (3.2%) to 6.008 million head, but the market hog inventory increased 1.134 million head (1.7%) to 68.479 million head. The data implies slaughter will run around 2% above year-ago through summer and then slightly more than 1% higher through the fourth quarter and early 2025.
USDA's Agricultural Marketing Service (AMS) published a proposed rule on Fair and Competitive Livestock and Poultry Markets
The rule in the Federal Register initiates a 60-day comment period ending on August 27. The rule has garnered both criticism and praise within the US agriculture industry. During the Office of Management and Budget (OMB) review, there were four meetings held—two with groups opposing the rule and two with groups supporting it. The forthcoming comments are expected to reflect the issues raised during these meetings.
The next week’s likely high-low price trading ranges:
August lean hog futures--$86.225 to 92.50 and with a sideways bias
September soybean meal futures--$325.00 to $345.00, and with a sideways-lower bias
December corn futures--$4.12 to $4.35 and a sideways bias
Latest analytical daily charts lean hog, soybean meal and corn futures
