Alberta Pork Market Report, December 19th 2018

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The Pork Market Report will not be delivered during the week of December 24, due to the Christmas break. Reports scheduled for the weeks of December 31 and January 7, likewise, may experience interruption.

Retail meat prices to decline in 2019

Retail meat prices are expected to decline in 2019, to the delight of consumers, but what are some of the underlying issues? Read more.

ManureTracker eliminates paper records

ManureTracker is a manure record-keeping application to improve farm management. Alberta Pork was a partner in creating the app. Learn more.

Summer employment info sessions

The Summer Temporary Employment Program (STEP) funds Alberta employers to hire summer students. The next info session is on December 20 at 10 a.m. Tune in live.

Manure Management and Agronomy Updates

Alberta Agriculture and Forestry is hosting its next Manure Management Update on January 14 (early-bird registration deadline is December 21) and its Agronomy Update on January 15 and 16. Both events take place in Lethbridge.

Pricing overview

Cash markets continue to struggle heading into the holiday season as packers take advantage of ample hog supplies limiting values needed to attract record volumes.  US federally inspected slaughter topped 2.600 million hogs again last week adding to the weakness that has been experienced over the last 2 months.  US weekly cash markets peaked in early October and have been trending lower ever since.  Good news is that the downward trend appears to be easing which could signal a turnaround in cash markets once into the New Year.

Lean hog futures on the other hand have been steady increasing over the last 2 months and only recently have they experienced some weakness.  Most 2019 lean hog contracts traded sharply higher from the start of October registering new contract highs, with some just recorded last week.  More nearby months like February and April however peaked in late November and have come under some pressure dropping $2-3 US per cwt from their posted highs.
Although lean hogs have dropped off from top values, they still provide excellent hedging opportunities for producers looking to limit risk for much of 2019.  Deferred contracts such as October and December 2019 are still very near their top, down only a $1 US from the peak reached last week.  With the Canadian dollar in the producer’s favor, hedging is encouraged for a minimum of 25% of production.  Coverage of 50% in most volatile months is also recommended.

Weekly hog price recap

Regional and national cash hogs slipped another week, with late week strength not enough to reverse early week losses amid moderate cash bid volume. CME cash by comparison, declined throughout the week however daily price moves were more moderate. Wholesale pork values were generally improved excluding hams and butts, with cutout $0.88/cwt higher than a week earlier.

Most monitored markets on either side of the border declined from a week earlier. The only Canadian market to report improved values from last week was the newly WHE 2019 which rose $1/hog. Hog markets based off 201-derived pricing declined the least, falling $0.50-$1/hog. Alternatively pricing out of Thunder Creek, the Sig 5 and WHE 17 each fell near $2/hog.  In the US, JM pricing declined shy of $3/hog while Tyson dropped more than $4/hog.

Weekly hog margins

Feed costs inched higher this week, putting further pressure on hog margins, dragging hog margins to 13-week lows. Canadian farrow to finish feed costs climbed 0.60/hog, while those in monitored US regions were narrowly unchanged to modestly higher. Hog margins off the WHE 19 managed to strengthen a modest $0.60/hog, while the WHE 17 & Sig 5 weakened near $3/hog. Hog margins out of Ontario and Hylife each weakened more than $1/hog while those out of Quebec and off the Sig 4 fell less than $1/hog. In the US, Tyson hog margins dropped $4/hog while JM margins were calculated $3/hog lower.

U.S. regional margins

  • Tyson: $(14.43) USD X 1.3373 = $(19.30) CAD
  • Morrell: $(24.51) USD X 1.3373 = $(32.78) CAD
Disclaimer: Commodity Professionals Inc. presents this report as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes only and should not be reproduced or transmitted by any means without permission. Commodity Professionals Inc. does not guarantee, and accepts no legal liability arising from or connected to, the accuracy, reliability, or completeness of any material contained in the publication.

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