Pig outlook: lean hog futures prices power still higher
Pig prices are reaching record highs in the US, while the Chinese market seems poised for a downturn.
by Jim Wyckoff, The Pig Site
4 June 2021
The pig trader's perspective
Lean hog futures prices this week set new contract highs and are now reaching extremes set in 2014. The key to hold these lofty price levels will be export demand for US pork. Traders will have to wait until Friday for this week’s USDA weekly export sales tallies, due to the Memorial Day holiday on Monday.
Hog prices in China continue to fall. Even farms using their own piglets are now losing money. That may trim new Chinese purchases of US pork.
The ransomware attack on JBS that interrupted hog processing early this week appears to be past the market now. Cash hog prices Wednesday rose a solid $3.21 on a national direct basis. Wednesday’s hog slaughter was estimated by USDA at 439,000 head, compared to 483,000 last Wednesday and 426,000 one year ago at this time. A sign that all operations are not yet up to 100%.
Average hog weights in the Iowa/southern Minnesota market fell 0.4 lbs the week ending 29 May to 283.1 lbs, which is well under year-ago when COVID-19-related processing closures/pullbacks were backing up supplies.
The next week’s likely high-low price trading ranges
· August lean hog futures-$113.00 to $120.00 and with a sideways-higher bias
· July soybean meal futures-$378.30 to $407.00, and with a sideways
· July corn futures-$6.50 to $7.00, and a sideways bias
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