Pig outlook: Lean hog futures costs trending increased

15 September 2023

4 minute learn

October lean hog futures this week hit a five-week excessive and costs are in an uptrend on the each day bar chart. That implies the trail of least resistance for costs within the close to time period is sideways to increased. The most recent CME lean hog index is up 35 cents at $86.48. It’s possible hog costs can be supported within the coming month earlier than turning decrease into the vacations. Excessive retail beef costs on the meat counter and rising gasoline costs counsel pork might turn out to be extra enticing to the patron within the coming months. Hog weights stabilized following the August warmth wave, rising 3.3 kilos to a mean of 279 kilos final week, although that continues to be one pound beneath year-ago.

Weekly US export gross sales for beef, pork

Beef: Web gross sales of 6,200 MT for 2023 have been down 48 % from the earlier week and 56 % from the prior 4-week common. Will increase primarily for China (2,000 MT, together with decreases of 100 MT), Mexico (1,300 MT, together with decreases of 400 MT), Japan (600 MT, together with decreases of 1,000 MT), Hong Kong (400 MT, together with decreases of 100 MT), and Guatemala (400 MT), have been offset by reductions for the UK (100 MT). Exports of 13,200 MT have been down 10 % from the earlier week and 15 % from the prior 4-week common. The locations have been primarily to South Korea (3,700 MT), China (2,600 MT), Japan (2,100 MT), Mexico (1,000 MT), and Hong Kong (900 MT).

Pork: Web gross sales of 23,100 MT for 2023 have been down 12 % from the earlier week and 26 % from the prior 4-week common. Will increase primarily for Mexico (6,300 MT, together with decreases of 200 MT), Canada (4,500 MT, together with decreases of 700 MT), Japan (4,200 MT, together with decreases of 200 MT), South Korea (2,100 MT, together with decreases of 500 MT), and Colombia (1,500 MT, together with decreases of 100 MT), have been offset by reductions for Nicaragua (1,400 MT). Exports of 20,700 MT have been down 32 % from the earlier week and 28 % from the prior 4-week common. The locations have been primarily to Mexico (7,200 MT), China (3,200 MT), Japan (2,400 MT), South Korea (2,200 MT), and Canada (1,800 MT).

US Customs cease shipments of prohibited meat from Hong Kong

Final week, US Customs and Border Safety (CBP) on the Louisville Port of Entry intercepted a number of shipments containing pork not declared in bins hoping to keep away from detection, based on a press launch from the authorities. Between August 20 and August 28, Agriculture Specialists stopped 13 shipments from the identical company in Hong Kong, heading to the identical firm in Bellerose, New York. Every cargo contained pork gadgets, some contained pork and poultry gadgets, and one contained pork and different prohibited meals. In whole 1,104 kilos of pork, 298 kilos of poultry, and 88 kilos of prohibited meals have been seized. The receiving company was notified about their prohibited shipments and the meals was destroyed.

Pork merchandise from Hong Kong are prohibited as a result of outbreaks of African swine fever, Classical swine fever, and swine vesicular illness within the area. Due to the presence of those three swine ailments, all pork merchandise from Hong Kong should not permitted with out the relevant US Division of Agriculture Veterinary Providers permits. Moreover, the avian merchandise from Hong Kong are additionally prohibited due to Virulent Newcastle Illness and Extremely Pathogenic Avian Influenza.

USDA lowers meat manufacturing and exports

USDA minimize its beef manufacturing forecast by 40 million lbs. from final month amid a slower tempo of marketings through the third quarter. Beef manufacturing is now anticipated to drop 1.35 billion lbs. (4.8%) from final yr. USDA lowered its 2023 beef export forecast 160 million lbs. from final month, with shipments now anticipated to fall 13.8% from year-ago. These modifications resulted in no adjustment to the 2023 common money steer value, which is projected at $178.50, unchanged from final month however up $34.10 from final yr.

For 2024, USDA made no change to its beef manufacturing projection, however decreased exports. Beef manufacturing is forecast to six.6% subsequent yr, with exports prone to drop one other 5.0%.

USDA minimize its pork manufacturing forecast 105 million lbs. from final month amid “a decrease anticipated tempo of slaughter and lighter carcass weights,” although it’s nonetheless anticipated to rise 0.6% from final yr. The pork export forecast was minimize 125 million lbs., although shipments are nonetheless anticipated to rise 7.2% from final yr. USDA lowered its 2023 common money hog value $2.30 from final month to $59.90, which might be down $11.31 from final yr.

For 2024, USDA made no change to its pork manufacturing projection, however decreased exports. Pork manufacturing is anticipated to rise 0.6% from this yr, whereas exports are nonetheless anticipated to rebound 1.5% from this yr’s stage.

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

October lean hog futures–$80.95 to $86.75 and with a sideways-higher bias

December soybean meal futures–$379.00 to $415.00, and with a sideways-lower bias

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

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