US hog markets stabilise and higher prices likely in weeks ahead

The US hog futures market this week has appeared to stabilise from recent strong selling pressure.

21 February 2020

4 minute read

By: Jim Wyckoff

North America

This is due in part to hopes for better US pork exports in the coming months. China this week moved to relax tariffs on nearly 700 US agricultural goods, including pork. The US has already been exporting record amounts of pork to China, and the tariff cuts, China’s need protein, and its Phase 1 trade agreement with the US provide plenty of reason for China to import even more pork from the US. Look for US hog futures to continue to stabilise in the coming weeks, with the longer-term prices charts suggesting hog futures prices will rise in the coming weeks and months.

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

April lean hog futures: $63.10 to $70.00, and with an upside bias.

May soybean meal futures: $294.50 to $303.00, and with an upside bias.

May soybean futures: $8.94 3/4 to $9.17 and with an upside bias.

May corn futures: $3.80 to $3.90, and a sideways bias.

Latest US Department of Agriculture (USDA) reports

The highly anticipated supply and demand projections released Thursday morning by the US Department of Agriculture (USDA) show US agricultural exports in fiscal year (FY) 2020 are projected at $139.5 billion, up $500 million from the USDA’s November forecast, as higher soybean, wheat, and poultry export forecasts more than offset reductions in corn and soybean meal.

Soybean and wheat exports are projected up $400 million each on higher volumes. Corn exports are forecast down $500 million due to strong competition from Brazil, Argentina, and Ukraine. Overall grain and feed exports are forecast at $29.7 billion, $200 million higher than the November forecast. Soybean meal exports are projected $300 million lower, while total oilseed and product exports are unchanged.

Livestock, poultry, and dairy exports are raised by $500 million to $32.4 billion, led by higher poultry and poultry product exports, which are $400 million higher on stronger volumes and values for broiler and turkey meat. Cotton exports are forecast up $100 million on higher unit values. Horticultural product exports are unchanged at $35.5 billion.