14 June 2024

3 minute read

By: Jim Wyckoff

July lean hog futures have seen sideways and choppy price action at lower levels for the past week. Bulls are hoping they have stopped the bleeding. However, the technical posture for lean hog futures remains firmly overall bearish and there are no strong, early chart clues that a market bottom is close at hand. Fundamentally, the latest CME lean hog index is up 6 cents to $91.38 as of June 11, ending a four-day skid. Still-elevated beef prices at the meat counter and peak grilling season give the hog market bulls hope that pork prices will rebound in the near term.

Latest USDA and other news regarding the global pork industry

China could target EU pork, dairy in retaliation for EV tariffs

Food companies from dairy producers to pork exporters are on high alert for potential retaliatory tariffs from China after the European Union’s decision on Wednesday to impose anti-subsidy duties on Chinese-made electric vehicles (EVs). China’s state media reported domestic companies are preparing to request investigations into some EU dairy and pork imports over anti-subsidy or anti-dumping concerns. As trade tensions between the EU and China intensify, some European officials have warned against imposing import duties on food products.

China’s sow herd shrinks, slaughter rises

China’s sow herd totaled 39.86 million head at the end of April, down 6.9% from last year, according to the ag ministry. Hog slaughter during the first four months of this year rose 2.3% from the same period last year to 108.38 million head.

Vilsack on Supreme Court decision and Proposition 12

USDA Secretary Tom Vilsack expressed concerns that the Supreme Court "didn’t understand" the pork market when it upheld California's animal welfare law, Proposition 12. Speaking in Asheville, North Carolina, Vilsack highlighted the tension between states' rights to regulate farming within their borders and the implications of extending these regulations to farmers in other states.

California’s Proposition 12 has faced backlash from major pork-producing states. The House farm bill aims to overturn Prop 12 and similar state animal welfare laws affecting dairy, beef, and pork products, while still allowing states to enforce their laws within their own borders.

Vilsack suggested that Congress has the opportunity to clarify that states can regulate farming practices within their borders but should not impose those regulations on farmers in other states. However, he also pointed out the political challenges, noting potential opposition in the Democratic-controlled Senate and the difficulty in passing the farm bill.

Vilsack concluded by acknowledging the complexity of the issue and the need to carefully consider the political costs involved.

China’s meat imports increase in May

China imported 557,000 MT of meat in May, up 2.4% from April but down 6.7% from last year. Through the first five months of this year, China imported 2.78 MMT of meat, down 11.5% from the same period last year.

Germany confirms case of ASF

A case of African swine fever (ASF) has been confirmed on a pig breeding farm in Greifswald in the eastern state of Mecklenburg-Vorpommern, the state’s ag ministry said. China and other countries banned imports of German pork in 2020 after an ASF outbreak in the country. China’s import ban remains in place.

The next week’s likely high-low price trading ranges:

July lean hog futures--$91.00 to 98.20 and with a sideways-higher bias

July soybean meal futures--$354.70 to $375.00, and with a sideways bias

July corn futures--$4.47 3/4 to $4.71 and a sideways bias

Latest analytical daily charts lean hog, soybean meal and corn futures