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Lean hog futures turned down in the week ending Jan 9. There were gains Wed and Fri but not enough to compensate for losses Mon, Tue, and Thu. Pressure came from weak hog cash and cattle futures, and the outlook for growing pork supplies for 2015. Pork cutout was higher on Thu but had little impact. Technical chart indications brought more downside. Short covering lifted futures Wed in spite of higher hog weights, and there was some renewed concern about PED in cold weather. A poor export report for Nov showed a drop of 20% from last year and 5% from Oct, pressuring trade on Thu. Rising poultry production is another concern. The futures rise on Fri came on profit taking and the cold weather conditions, lifting Feb the most +0.85 that day but still -2.28 for the week. Summer futures lost more, Apr -3.45 while Oct and Dec about -1.
Average hog weights in Iowa-Minnesota for the week ending Jan 2 were up 0.8 pounds at 287.7 which was up 4.8 from last year. Nationally the weights for last week averaged 286 pounds, up 2 from last year. Pork production for the week was higher than last year by 18.3 million pounds at 464.3. Slaughter for the first full week of the year at 2.143 million was up 7% from 1.998 last year.
The number of new PEDv cases reported for the week ending Jan 2 was 59, up 8 from previous week and down 63 from last year. PEDCoV cases were reported 7, down 1 from previous week.
Wholesale pork cutout values for the FOB plant were lower on average for the week by 2.11 on losses in all primals except bellies up 4.69.
US cash prices were down: WCB -1.88/cwt, ISM -1.94, and the National slaughter price -0.94 while the VMR was -0.73.
Cash prices in Canada were mostly higher from the rise in exchange rate, Sig 4 +1.11/hog, Sig 3 -0.05, Olymel +1.49 while Tyson’s VMR +C$1.76/hog.
Price Comparison Table
The Canadian dollar was weakened further from more declines in crude oil prices on OPEC’s decision to keep output unchanged and Saudi Arabia cutting oil prices to European buyers. The average Bank of Canada noon rate rose .0182 to 1.1822. The US House approved Keystone XL oil pipeline on a 266 to 153 vote but that would not reduce output in the excess world supply. Canada’s trade deficit unexpectedly climbed to almost 2-year high from C$327 million to C$644 million. Stock markets declined in Canada, US, and Europe where losses were extended on the potential exit of Greece from the EU. The European Central Bank is planning to purchase bonds to stimulate the economy. Asian stocks were higher, China’s consumer inflation was up 1.5%.