Pig outlook: Lean hog futures prices trending lower

calendar icon 2 September 2022
clock icon 3 minute read

The pig traders’ perspective: Cash hog fundamentals continue to weaken. The national direct cash hog price fell $2.02 on Wednesday. The CME lean hog index is down another $1.74 as of Aug. 30 to $107.62 – the lowest level since June 10. With packer margins solidly in the red, additional cash weakness is expected as slaughter supplies build seasonally into the end of the year. The pork cutout has fallen sharply recently, which has driven packer margins into the red at a time when market-ready supplies are building seasonally. That will keep the cash market under pressure.

FDA to hold listening session Oct. 18 on animal feed claims

The virtual public listening session is on FDA’s regulation of animal foods that make certain environmental and production claims, including reduced greenhouse gas emissions, growth promotion and feed efficiency. The session is part of FDA’s review of the Center for Veterinary Medicine’s policy and procedures manual for the regulation of animal foods with drug claims. FDA wants feedback on how the existing policy could be updated to reflect evolving scientific knowledge and to promote innovation.

USDA awards grants to shore up poultry, meat supply chains

USDA’s Agricultural Marketing Service (AMS) today announced an additional $21.9 million of funding is being awarded to 111 grant projects through the Meat and Poultry Inspection Readiness Grant Program (MPIRG), bringing total funding to $54.6 million. This year’s awards will fund projects in 37 states. The funding will help strengthen and develop new market opportunities for meat and poultry processors throughout the United States. To further these efforts, AMS is also encouraging MPIRG awardees and eligible participants in USDA’s Meat and Poultry Supply Chain initiatives to request assistance through the Meat and Poultry Processing Capacity Technical Assistance Program (MPPTA). Launched in March 2022, MPPTA connects participants to a nationwide network of resources and expertise.

“The Meat and Poultry Inspection Readiness Grants will help meat and poultry processors make necessary facility improvements, expand their businesses, and strengthen the nation’s food supply chain,” said Secretary of Agriculture Tom Vilsack. “These grants are one part of USDA’s Meat and Poultry Supply Chain initiatives and will contribute to our efforts to transform our food system.”

“USDA continues to build capacity and increase economic opportunity for small and midsized meat and poultry producers across the country,” added Under Secretary for Marketing and Regulatory Programs Jenny Lester Moffitt.

China halts some meat imports from U.S. processor Tyson Foods

The halt affects products from a plant owned by Tyson Fresh Meats Inc., the beef and pork subsidiary, for shipments from Aug. 29, after some products from the producer failed inspection, according to a notice published on the customs website. USDA confirmed on its website that the Logansport, Indiana, facility was ineligible for exports to China. The move follows Beijing’s halt on shipments of meat products from two other U.S. plants in the past month or so, citing the presence of ractopamine, a feed additive used in the U.S. but banned by China. The Tyson suspension shouldn’t have much impact on the meat trade between the two countries as there are still a lot of U.S. plants eligible to export to China.

China to sell state pork reserves

China’s state planner said it will release pork reserves from September to ensure meat supply during upcoming holidays when demand typically increases. Pork prices have risen rapidly in recent months amid tighter supplies. Meantime, China’s sow herd at the end of July totaled 42.98 million head, according to the country’s ag ministry, up 0.5% from June but down 5.3% from last year.

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

October lean hog futures--$89.75 to $95.00, and with a sideways-lower bias

December soybean meal futures--$400.00 to $424.20, and with a sideways-lower bias

December corn futures--$6.40 to $6.83 3/4 and a sideways bias

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

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