Pig outlook: Lean hog futures in fledgling price uptrend
Analyst Jim Wyckoff shares an update on the US futures market, USDA reports and global pig news
25 November 2022
3 minute read
By: February lean hog futures prices this week have rallied and are keeping a live a price uptrend on the daily bar chart. However, there are stiff overhead resistance levels that may halt the rally in the near term. The latest CME lean hog index is down 43 cents to $86.54 (as of Nov. 21), the lowest level since Feb. 4. Last year, the cash index bottomed on Nov. 29 and then started a strong price recovery that lasted into August. History suggests the combination of seasonally weak demand for most pork cuts other than hams, as well as slaughter totals approaching annual highs, will exert some pressure on hog prices. However, strong consumer demand for pork, as well as the shortage of turkeys and hams, will limit any price losses. Traders will closely scrutinize the USDA’s quarterly Hogs & Pigs report on December 23.
China’s pork imports remain far below a year ago
China imported 160,000 MT of pork in October, which was up 6.7% from September but down 20.6% from last year. Through the first 10 months of this year, China imported 1.38 MMT of pork, down 58.8% from the same period last year.
Smithfield Europe announces packaged meats acquisition
Smithfield Europe, a subsidiary of U.S.-based Smithfield Foods, has reached an agreement to acquire Goodies Meat Production SRL, a Romanian producer of private-label packaged meat products for the retail channel.
The company operates a production facility in Ceptura de Jos, Prahova, and employs 320 people. The portfolio of products includes salami, ham, bacon, baloney and other meat specialties.
“The acquisition of Goodies Meat Production is part of Smithfield Europe’s strategic growth plan and complements and strengthens our existing business,” said Luis Cerdan, executive vice president of Smithfield Foods’ European business. “Goodies brings a team of outstanding employees, high-quality products, excellent operating standards, and a platform for growth through expanded production capacity. The combined business will benefit from vertical integration opportunities within our group of companies in Europe.
US lawmakers seek extension of USDA proposed rule on livestock marketing
A bipartisan group of US senators is asking USDA to extend the comment period on their proposed rule for “Inclusive Competition and Market Integrity Under the Packers and Stockyards Act.” The comment period is set to end Dec. 2 and Sens. Chris Coons (D-Del.) and Roger Wicker (R-Miss.) along with 17 others called on USDA to extend the comment period for 180 days as the rule has “novel regulatory concepts, which would have wide-ranging impacts on the contracting of poultry, cattle and hogs.” An extension would allow for the agency to receive the “most substantive comments possible” from stakeholders and constituents. The lawmakers said the proposed rule is in effect linked to a proposed rule on poultry grower contracting and tournaments and a yet-to-be released plan to clarify the scope of the Packers and Stockyards Act. Given the linkage of all three regulatory actions, the lawmakers said the lengthy comment period extension is needed so that those affected can “consider USDA’s competition agenda in its entirety.”
The next week’s likely high-low price trading ranges:
February lean hog futures--$88.00 to $93.30 and with a sideways-higher bias
March soybean meal futures--$394.00 to $410.00, and with a sideways bias
March corn futures--$6.50 to $.6.80 and a sideways-lower bias
Latest analytical daily charts lean hog, soybean meal and corn futures
