Pig outlook: Lean hog futures bulls acquire late-week momentum

1 September 2023

4 minute learn

October lean hog futures on Wednesday posted stable positive factors and hit a three-week excessive because the near-term technical posture improved. Essentially, seasonal money hog weak spot is bearish. The newest CME lean hog index is down one other $1.74 to $90.67, marking the largest day by day decline since costs began their seasonal drop in late July. Throughout that span, the money index has fallen $15.33. 

Bullish parts for the hog market embody the weekly report on Iowa-southern Minnesota pig gross sales and weights confirmed final week’s common market hog weight dropped 4.0 kilos from the week previous to 274.3 lbs. per head. The drop seemingly mirrored final week’s excessive warmth over the area however may point out the trade was pulling hogs forward. The sharp weight drop and implication of diminished market-ready provides could put in a backside within the money hog market quickly.

Weekly USDA export gross sales for US pork

Pork: Internet US gross sales of 36,900 MT for 2023 had been up 12 % from the earlier week and 45 % from the prior 4-week common. Will increase had been primarily for Mexico (12,000 MT, together with decreases of 500 MT), China (7,800 MT), South Korea (5,500 MT, together with decreases of 600 MT), Japan (4,200 MT, together with decreases of 300 MT), and Canada (1,900 MT, together with decreases of 1,200 MT). Whole internet gross sales of 400 MT for 2024 had been for Japan. Exports of 31,300 MT had been up 24 % from the earlier week and 16 % from the prior 4-week common. The locations had been primarily to Mexico (13,000 MT), Japan (4,400 MT), China (3,000 MT), South Korea (2,700 MT), and Canada (2,700 MT).

USDA: United States and Canadian Hog Stock Down Barely

USDA stories United States and Canadian stock of all hogs and pigs for June 2023 was 86.2 million head. This was barely decrease than June 2022 and down 2 % from June 2021. The breeding stock, at 7.39 million head, was barely decrease than final yr and down 1 % from 2021. Market hog stock, at 78.8 million head, was barely decrease than final yr and down 2 % from 2021. The semi-annual pig crop, at 80.0 million head, was up 1 % from 2022 however down 1 % from 2021. Sows farrowing throughout this era totaled 7.06 million head, down 1 % from final yr and down 2 % from 2021.

United States stock of all hogs and pigs on June 1, 2023 was 72.4 million head. This was up barely from June 1, 2022 however down 1 % from March 1, 2023. The breeding stock, at 6.15 million head, was down barely from final yr, however up 1 % from the earlier quarter. Market hog stock, at 66.2 million head, was up barely from final yr, however down 1 % from final quarter. The pig crop, at 32.9 million head, was up 1 % from 2022 however down 1 % from 2021. Sows farrowing throughout this era totaled 2.90 million head, down 2 % from 2022 and down 5 % from 2021.

Canadian stock of all hogs and pigs on July 1, 2023 was 13.8 million head. This was down 1 % from July 1, 2022 and down 4 % from July 1, 2021. The breeding stock, at 1.24 million head, was down barely from final yr and down 2 % from 2021. Market hog stock, at 12.5 million head, was down 1 % from final yr and down 4 % from 2021. The semi-annual pig crop, at 15.0 million head, was up 1 % from 2022, however down 2 % from 2021. Sows farrowing throughout this era totaled 1.25 million head, up 1 % from final yr, however down 2 % from 2021.

FSA updates LIP cost charge for Midwest livestock producers

USDA’s Farm Service Company (FSA) is updating the Livestock Indemnity Program (LIP) cost charge to assist livestock producers within the Midwest who’ve misplaced cattle to the acute warmth and humidity skilled this summer time. To assist indemnify ranchers to replicate a development in direction of larger cattle weights in feedlots, the 2023 LIP cost charge for beef calves over 800 lbs. will enhance from $1244 per head to $1618. 

LIP offers advantages to livestock homeowners and a few contract growers for livestock deaths exceeding regular mortality from eligible antagonistic climate occasions, sure predation losses and diminished gross sales costs attributable to damage from an eligible loss. Indemnity funds are made at a charge of 75% of the prior yr’s common truthful market worth of the livestock. The up to date LIP cost charge is efficient instantly and can be utilized retroactively beginning Jan.1, 2023, for all eligible causes of loss together with extreme warmth, twister, winter storms and different qualifying antagonistic climate. 

Producers who’ve already obtained LIP funds for 2023 losses will obtain a further cost, if relevant, commensurate with this up to date charge.

China’s sow herd inches decrease in July

China’s sow herd in July fell 0.6% towards the prior month to 42.71 million head, ag ministry information confirmed. The sow herd was additionally 0.6% smaller than final yr. Hog slaughter in July jumped 26.7% from final yr.

The following week’s seemingly high-low value buying and selling ranges:

October lean hog futures–$77.75 to $86.75 and with a sideways bias

December soybean meal futures–$400.00 to $425.00, and with a sideways-higher bias

December corn futures–$4.73 1/2 to $5.00 and a sideways bias

Newest analytical day by day charts lean hog, soybean meal and corn futures