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Declines in hog futures became greater in the week ending Jan 16. The four-day trading week had losses Tue, Thu, Fri. Mixed trends Wed ended with most contracts higher, Jul the most +0.75. There had been some limit down declines Tue when cattle futures were also down along with hog cash. After higher afternoon cutout Tue, futures recovered partly Wed, also supported by lower hog weights and higher cutout Wed morning. Daily slaughter was running above previous year which perhaps along with concerns about the west coast pork strike delaying exports were the main factors. The rising US dollar also makes exporting difficult. Weekly the futures were down 5 to 7. Lower morning cash and cutout Thu brought pressure. Fri trading was affected by new PEDv cases in the US, 118 for the week of Jan 17, +3 from previous week but -100 from last year. PEDCoV were 10, -3 from previous week. Weekly pork export sales for the week of Jan 15 were 27,600 mt, down 15,700. Cattle traded lower most days.
Average hog weights in Iowa-Minnesota for the week ending Jan 16 were down 0.9 pounds at 287.1, up 3.4 from last year. Nationally the average weights for last week were 287 pounds, up 3 from last year. Pork production for the week was estimated at 499.2 million pounds, up 15.2 on the week and up 27.2 on the year. Slaughter was placed at 2.318 million head, up from 2.257 previous week and 2.214 last year.
Wholesale pork cutout values for the FOB plant were higher on average for the week by 1.36 on increases mainly in hams and loins offsetting others declining in value.
US cash prices were down similarly or more than previous week: WCB -2.17/cwt, ISM -2.04, and the National slaughter price -1.43 while the VMR was -2.63.
Cash prices in Canada were mixed, Sig 4 +0.85/hog, Sig 3 -1.34, Olymel -1.48 while Tyson’s VMR C$-2.06/hog.
Price Comparison Table
The Canadian dollar was sharply lower for the week in response to the Bank of Canada that cut the overnight interest rate to 0.75 from 1%. The stock market responded positively. European stocks were higher for the week, supported by firm German economic data and the European Central Bank decision to launch an asset purchase plan of €60 billion a month to increase inflation and boost economy. Asian markets were were also higher. China’s GDP rose 7.3% in the 3rd quarter but still the slowest since 2009. Their industrial production was up 7.9% and retail sales up 11.9%. The International Monetary Fund lowered its 2015 global GDP forecast to 3.5% from 3.8% and cut its 2015 China GDP to 6.8% from 7.1%, also Euro zone 1.2% from 1.3% but raised US to 3.6% from 3.1%. The World Bank also raised the US forecast from 3.0% to 3.2%. Crude oil prices continued lower on large US production.