Alberta Pork Weekly Report April 5, 2022

By
Jim Eadie
-

 


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Alberta Pork Weekly Report

April 5, 2022

Announcements, news and reminders

 

From Alberta Pork

 

AFSC deadlines upcoming – end of month

Sat., Apr. 30 is the deadline for three services offered by the Agriculture Financial Services Corporation (AFSC):

  • AgriStability: 2022 enrolment and fee due (no penalty)
  • Perennial Crop Insurance: Last day to remove grazing livestock from insured hay fields
  • Annual Crop Insurance: Last day to apply, make changes to (including updating declared acres) or cancel coverage

See the full list of 2022 deadlines.

Squeal on Pigs! virtual forum – next month

The Alberta Invasive Species Council (AISC) is hosting a webinar on Wed., May 11, starting at 6 p.m., to provide insight into Alberta’s wild boar management strategies. Register now, free-of-charge.

Public perceptions wield increasing influence

Understanding the many perspectives that shape public trust in animal agriculture relies on a great deal of speculation. But the list of questions, and the need for answers, grows constantly. Read the full story in the Banff 2022 edition of the Canadian Hog Journal.

Read the full edition online or check your mailbox, and keep an eye on the Canadian Hog Journal website, Twitter and Facebook for more articles to be published separately in the coming weeks.

Economics dashboard

 

View the latest economics dashboard

Alberta Pork’s economics dashboard, designed with producers in mind, features regularly updated information on hog markets, grain markets and more.

Feed cost modelling

Supplied by Gowans Feed Consulting

View the latest feed price calculator

The information in this section of the Alberta Pork Weekly Report (this email) reflects the feed cost situation experienced at the time the section was last updated, on March 16, 2022.

Markets have been up considerably since late February with market movements largely being driven by day to day headline news about the war in the Ukraine. While South American yields typically takes the headlines this time of year, its impact on pricing has been muted on a relative basis. Here is an overview of ingredient pricing delivered Red Deer:

  • Corn futures have risen dramatically since Russia invaded the Ukraine due to concerns about global grain supplies. Current spot price is around $465-470/T delivered Red Deer
  • Wheat futures rose to the point where targets of $14.50/bu were being hit at elevators. They have backed off since that point but farmers are still targeting over $500/T delivered. Upward price movement has been driven by supply concerns with Russia and the Ukraine representing 29% of global wheat exports
  • Barley has stayed more flat than the other grains with prices between $435-440/T delivered
  • Corn DDGS offers have had a wide range of prices as various sellers work through positions but average has been around $510/T delivered in the Red Deer area of late
  • Soybean meal prices have skyrocketed in part due to downgraded soybean yield projections in South America and export concerns out of Argentina. Prices have been between $775-$800 delivered depending on the day, hour, minute…
  • Canola meal has followed soybean meal upwards with prices between $590-600 delivered in the Red Deer area
  • Feed peas have become more available in small volumes over the past month with prices between $500-510/T delivered.

We expect the volatility to continue in the nearby.

Disclaimer: Gowans Feed Consulting presents the ingredient prices and feed cost modelling as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes online and should not be reproduced or transmitted by any means without permission. Gowans Feed Consulting does not guarantee and accepts no legal liability arising from or connected to the accuracy, reliability or completeness of any material contained in this publication.

Hog supply and price reporting

Supplied by Agriculture and Agri-Food Canada (AAFC)

View the latest hog supply report as a PDF

Information last updated April 9, 2022

Supplied by Commodity Professionals Inc.

View the latest pork market report as a PDF

The market information in this section of the Alberta Pork Weekly Report (this email) reflects the production cycle of the previous six months and pig pricing information at April 5, 2022.

Pricing overview

After nearly 8 months of firm lean hog markets, nearby futures came under heavy sell pressure shedding up to $15 US per cwt or $40 per hog during the first week of April.

The sharp sell off in nearby June and July came after most 2022 lean hogs registered new “life of contract highs” on the last trading day of March.  Since the end of the month nearby and deferred contrats have traded inverted to eachother with most nearby months experiencing weakness and 4th quarter contracts remaining steady to firm.  The sharp drop in nearby contracts can be attributed to specualtive traders dumping long positions which are typically held in the front half of the market.  The June 2022 top registered on March 31, 2022 of $127.32 was only a few dollars from the top June trade from 2014 of $133.00 recorded on March 18, 2014.

Forward contract prices for most Canadian markets shadowed the lean hog futures with summer premiums pulled from the market while contractable prices from Sep to Dec continued to added value at the start of this month.

With cash markets taking a breather to start the 2nd quarter it should come as no surprise that futures, which carried a $15 US/cwt premium to cash came under pressure.  The slowing of pork values were also a major influence in the losses recorded in both cash and futures markets over the week.

Although 2022 remains to be seen as one of the highest priced years for hog prices in recent history, sharply higher production costs are forcing producers to remain sharp when it comes to their hedging decisions.

Weekly hog price recap

Cash hogs recorded declines for much of the week, with national and regional cash down the most Thursday following a modest recovery Wednesday. CME cash improved overall with late-week declines tempering some of the earlier rises. Most wholesale pork primal values declined on the week, only picnics and loins improved, driving US pork cutout $1.24/cwt under the previous week’s average.

Canadian market hog values generally improved, excluding those derived from lagged base pricing. Hog values out of the ML Sig 4, Ontario and Quebec each improved $2.40/hog, followed by those out of Hylife which climbed $2.30/hog. BP/TC hog values declined $1.10/hog, while the OlyW 20 slipped $0.35/hog and the OlyW 21 was up $0.20/hog from a week earlier. Hog values in the US fell on the week due to lower cash hog values, with Tyson down $1/hog while JM dropped $7.70/hog from week ago levels.

Weekly hog margins

Monitored hog margins strengthened overall, supported by improved hog values and a significant reduction in feed costs. Canadian farrow-to-finish feed costs dropped $3.65/hog while those out of the monitored region in the US declined closer to $3/hog from a week earlier.

Hog margins out the OlyW 20 continue as the strongest recorded in Canada, rising $3.30 to $50.50/hog profits on the week. Margins out of Maple Leaf, Ontario and Quebec each improved near $6 on the week with Ontario at $41.60/hog profits, Quebec at $38.75/hog profits and the Sig 4 at $32.25/hog profits. Hylife hog margins were also up near $6/hog to $29.85/hog profits, while the OlyW 21 improved $3.85 to $24.75/hog profits. In the US, Tyson margins strengthened near $2 to $63.80/hog profits while JM weakened $4.75 to shy of $56.50/hog profits from the previous week.

U.S. regional margins

  • Tyson: $63.78 USD x 1.2451 = $79.41 CAD
  • Morrell: $56.43 USD x 1.2451 = $70.26 CAD

Disclaimer: Commodity Professionals Inc. presents the ingredient prices and feed cost modelling as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes online 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 this publication.

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