Hogs Consolidate

Ben DiCostanzoGeneral Commentary

June Lean Hogs stayed in neutral on Thursday, trading both sides of unchanged and settling just below the previous day’s settlement. The high came in at 102.85, the low at 100.675 and settlement was at 101.45. The market consolidated the past three days after the strong rally on Monday as traders waited for the Quarterly Hogs and Pigs Report that came out after the close. Demand for pork has been excellent with US consumers and exports sales driving cutouts higher. This week’s report showed Export Sales at 55,300 MT a marketing year high. This helped the price action but rallies weren’t sustained and futures settled in the lower end of the trading range with the report looming on traders’ minds. In my opinion, the report showed some bearish indications with breeding inventory, all hogs and pigs and pigs per litter coming in higher than expected.  The report summary is below. A failure from settlement could see price test support at 100.075. Support then comes in at 98.475. If settlement holds, it could retest resistance at 101.975 and then the Thursday high.

The Pork Cutout Index increased and is at 94.27 as of 03/27/2024.

The Lean Hog Index increased and is at 84.25 as of 03/26/2024.

Estimated Slaughter for Thursday is 489,000, which is below last week’s 490,000 and above last year’s 478,241. The estimated slaughter for the week (so far) is 1,946,000, which is below last week’s 1,952,000 and above last year’s 1,920,610.

United States Hog Inventory Up 1 Percent

United States inventory of all hogs and pigs on March 1, 2024 was 74.6 million head. This was up 1 percent from March 1, 2023, but down 2 percent from December 1, 2023. Breeding inventory, at 6.02 million head, was down 2 percent from last year, but up slightly from the previous quarter. Market hog inventory, at 68.6 million head, was up 1 percent from last year, but down 2 percent from last quarter. The December 2023-February 2024 pig crop, at 33.1 million head, was up 2 percent from last year. Sows farrowing during this period totaled 2.88 million head, down 3 percent from previous year. The sows farrowed during this quarter represented 48 percent of the breeding herd. The average pigs saved per litter was 11.53 for the December 2023-February 2024 period, compared to 11.02 last year.

United States hog producers intend to have 2.92 million sows farrow during the March-May 2024 quarter, down 1 percent from the actual farrowings during the same period one year earlier, and down 2 percent from the same period two years earlier. Intended farrowings for June-August 2024, at 2.99 million sows, are down 2 percent from the same period one year earlier, and down 3 percent from the same period two years earlier. The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 52 percent of the total United States hog inventory, up 1 percent from the previous year.

For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, April 02, 2024, at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

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