Pig outlook: Lean hog futures may be bottoming out

Livestock analyst Jim Wyckoff reports on global pig news
calendar icon 24 May 2024
clock icon 3 minute read

Lean hog futures continue to fall under heavy selling pressure as the technical posture remains overall bearish. However, the Relative Strength Index is suggesting the hog futures market is close to a bottom. Cash hog market fundamentals are eroding. The latest CME lean hog index is down 21 cents to $92.10 as of May 20 and the preliminary calculation puts the index down another 28 cents to $91.82 on Thursday. Losses in lean hog futures continue to outpace losses in the CME cash hog index as traders have been actively removing premium from futures as they maintain a generally pessimistic outlook for the summer rally.

Latest USDA and other news regarding the global pork industry

Weekly USDA US pork export sales

Beef: Net US sales of 21,500 MT for 2024 were up 42 percent from the previous week and 32 percent from the prior 4-week average. Increases were primarily for China (5,800 MT, including decreases of 200 MT), South Korea (5,100 MT, including decreases of 400 MT), Mexico (2,900 MT), Japan (2,500 MT, including decreases of 300 MT), and Taiwan (1,600 MT, including decreases of 200 MT). Exports of 17,300 MT--a marketing-year high--were up 11 percent from the previous week and 15 percent from the prior 4-week average. The destinations were primarily to South Korea (5,100 MT), Japan (3,300 MT), China (3,100 MT), Taiwan (1,500 MT), and Mexico (1,300 MT).

Hefty hog losses due to flooding in southern Brazil

The Brazilian state of Rio Grande do Sul incurred extensive losses of livestock and poultry due to recent flooding. Hog farmers lost an estimated 12,600 head after floods submerged entire towns in the state, Valdecir Folador, head of a local hog producers lobby ACSURS, said. He noted some 30 farms were affected, including those of suppliers to BRF and JBS. ASGAV, a group representing local poultry processors and farmers, estimated 279,000 head of poultry destined for slaughter died, as well as 150,000 laying hens. Four meatpackers’ plants were halted, ASGAV said. Rio Grande do Sul accounts for 24.2% of overall Brazilian pork exports and for 16.2% of Brazil’s chicken exports, according to national industry lobby ABPA. The port of Rio Grande, also disrupted by floods and landslides that blocked roads and affected a rail link to its terminals, ships nearly 9% of Brazil’s overall pork exports and 6.3% of the country’s chicken exports, according to ABPA data.

China’s pork imports remain slow

China imported 90,000 MT of pork in April, the same as March but down 35.7% last year. Through the first four months of this year, China’s pork imports stood at 340,000 MT, down 48.4% from the same period last year.

U.S. Meat Export Federation (USMEF) Spring Conference kicks off

In Kansas City, the lineup of guest speakers includes CattleFax CEO Randy Blach. He will discuss the status of the U.S. cattle industry’s herd rebuilding efforts, as well as other factors impacting protein supplies in both the domestic and international markets. Kip Tom, former U.S. Ambassador to the United Nations for Food and Agriculture, will update USMEF members on policies being debated by international organizations and key trading partners, and the potential implications for red meat trade. The USMEF Spring Conference runs through Friday. Speakers also include USDA Foreign Agricultural Service Administrator Daniel Whitley and Anne-Marie Roerink, a meat consumer insight expert and author of the Power of Meat report.

Iowa 'fake meat' law

Under a new law signed by Iowa Governor Kim Reynolds, meat alternatives sold in the state, such as plant-based proteins, must be labeled clearly to indicate they are not meat. Additionally, state-supported schools are prohibited from purchasing lab-grown meat.

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

June lean hog futures--$93.00 to 98.00 and with a sideways bias

July soybean meal futures--$365.00 to $390.00, and with a sideways-higher bias

July corn futures--$4.51 to $4.75 1/2 and a sideways-higher bias

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

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