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Pricing & Marketing Report - January 6, 2015

Prepared by Phoenix AgriTec Inc.                                                                                             Download a printer-friendly version of this article

Lean hog futures leveled off in the first holiday week ending Dec 26 after losses back to mid-Nov in some contracts.  Support came from a small rise in cutout, but cash was lower.  The USDA pig report Dec 23 was slightly bearish, showing market hogs up 1.8% from 2013 while expectations had averaged 1.5%, and breeding stock up 3.7% while expectations had averaged 3%.  However futures rose following the report to offset losses in the two days previous. The next week saw some gains in summer and later futures, as much as 1.73 Dec.  Nearby Feb and Apr were held to losses -0.25 and -0.70 in response to renewed weakness in cutout although cash was steady.  Strong cattle prices were the main support for hogs Mon, then as cattle eased Tue there were losses in hogs led by Apr.  Strength returned to hogs Wed without cattle rising, as traders were taking profits in hog futures at year end by buying back contracts sold previously.  Gains as much as Jul +0.60 came Fri on cattle returning to strength.  Fairly ample export sales of pork were reported for the week of Dec 26, 16,300 metric tons.

Average hog weights in Iowa-Minnesota for the week ending Dec 26 were up 1.7 pounds at 286.9, which was up 4.6 from last year.   Nationally the weights for last week averaged 287 pounds, up 3 from last year.  Pork production for the week was higher than last year by 3.8 million pounds at 429.5.  Slaughter for the week at 1.998 million was down slightly from 1.992  last year.  For the year in total, slaughter was down 5% and pork down 2%.

The latest report on new PED cases showed 50 for the week of Dec 26, down 68 from previous week, also down 68 from last year. The number of PEDCoV cases reported were 8, down 9 from previous week. 

Wholesale pork cutout values for the FOB plant were lower on average for the week by 2.04 on losses mainly in hams picnics and loins.  There were smaller gains in ribs and bellies.

US cash prices were mixed: WCB +0.34/cwt, ISM +0.47, and the National slaughter price -2.16 while the VMR was -1.00.

Cash prices in Canada were lower, Sig 4 $-6.02/hog, Sig 3 -0.57, Olymel -0.67 while Tyson’s VMR was down C$2.22/hog.

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The Bank of Canada noon rate rose by 0.0009 on the weekly average.  The Canadian dollar was lower except Tue when crude oil rose slightly.  Crude oil lost over $2 for the week as US stockpiles unexpectedly fell 1.8 to 385.5 million barrels. Canadian equities gained Mon and Fri while the US Dow lost for the week on poor economic data.  The US dollar gained strongly on the index against major currencies. 

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