Steve Dzier: Alberta Pork Pricing & Marketing Report: Week of July 3-6, 2012

Prepared by Phoenix AgriTec Inc.
The Canadian cash hog market extended its strength through much of the week, receiving pressure from base prices the entire week due to softening cutout values primarily seen in loins, ribs, and hams.  Assisting the current price is the drop in average hog weights which have been due to the extensive heat in the Midwest.  This type of abnormal weather is expected to further support prices into July.

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Packers’ need to increase bids was not as prevalent the week ending June 29th as the majority of packers had enough live supplies leading upto the Independence Day holiday.  The quarterly hogs and pigs report was perceived as neutral as total hogs and pigs were reported 0.8% above last year but well below expectations of 1.4%.

The CAN/US exchange rate positively affected domestic prices as the Loonie fell due to weak crude oil values.  Friday, the Canadian dollar rose sharply due to positive news out of Europe which sparked buying in crude oil.  For the week ending Jun 29, the 5-day average Bank of Canada noon rate gained 0.0040 basis points to 1.0270 CAN/US.

Compared to the previous week, Olymel was reported flat to higher, up $0.23 CAN per hog, as Maple Leafs Sig3 fell $1.55 CAN per hog.  The Sig4 rallied $10.13 CAN per hog higher, while the VMR was reported up $4.64 US per hog.

Composite pork cutout gained $0.77 at $98.38.  Ribs lost the most compared to all other primals, down $7.70.  Average barrow and gilt weights were reported at 271.4 lbs, down 0.7 from last week and +3.5 from last year.