August lean hog futures are now trending higher on the daily bar chart and hit a six-week high Wednesday. Bulls have the near-term technical advantage. Fundamentally, the latest CME lean hog index price is up another 84 cents to $86.25 (as of June 13), now more than $15.00 above the April low. July lean hog futures are presently more than $6.50 above the cash hog index, suggesting traders expect prices to continue a steady climb over the next month. The pork cutout value on Wednesday rose to $89.73, the highest level since December 2021. Hog market bulls are back in business.

Weekly USDA US pork export sales

US Pork: Net sales of 26,700 MT for 2023 were up 5 percent from the previous week, but down 2 percent from the prior 4-week average. Increases were primarily for Mexico (10,700 MT, including decreases of 300 MT), Japan (4,700 MT, including decreases of 600 MT), Australia (1,900 MT, including decreases of 100 MT), China (1,900 MT, including decreases of 300 MT), and Canada (1,600 MT, including decreases of 500 MT). Exports of 36,000 MT were up 44 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Mexico (14,400 MT), China (5,100 MT), Japan (3,900 MT), South Korea (3,200 MT), and Canada (1,800 MT).

Biden administration's spring regulatory agenda outlines potential timeline for several livestock-related actions

Among these is a Notice of Proposed Rulemaking (NPRM) for cell-based meat labeling, expected by the end of the year. There are also plans under the Packers and Stockyards Act: a) an NPRM for poultry grower payment systems and capital improvement systems in July, b) a final rule for transparency in poultry grower contracting and tournaments, expected this month (June) but not sent to the Office of Management and Budget for review yet, c) an NPRM on revised regulations concerning conduct that could violate the Act in November, and d) a final rule on inclusive competition and market integrity targeted for September. Additionally, USDA plans to release a final rule in August outlining organic livestock and poultry standards.

The Biden administration's spring regulatory agenda proposes two key actions for the meat industry. The first revolves around allowing beef imports from Paraguay by the Animal and Plant Health Inspection Service (APHIS), with a final decision targeted for March 2024. However, the actual date is still subject to change based on APHIS evaluation of public comments. The second action pertains to "Product of USA" labeling, where the Food Safety and Inspection Service (FSIS) plans to release a final decision in May 2024. FSIS proposed that the "Product of USA" and "Made in USA" labels to be used for meat products from animals that were born, raised, slaughtered, and processed in the U.S. In the meantime, FSIS is reviewing comments on the proposed rule. Additionally, APHIS is expected to release a final rule on cattle ID tags requiring both visual and electronic readability by February 2024. The Product of USA labeling effort is being monitored by Canada and Mexico to assess potential impacts on them.

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

August lean hog futures--$82.00 to $95.00 and with a sideways-higher bias

August soybean meal futures--$380.00 to $400.00, and with a sideways bias

December corn futures--$5.45 to $5.75 and a sideways-higher bias

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