Livestock analyst Jim Wyckoff shares this week’s global pig news
July 7, 2023
4 minute read
Lean Hog futures have soared this week as prices continue their technical breakout and price uptrend amid the seasonally bullish advance in Cash Hog prices. The latest official quote from the CME lean hog index rose 39 cents to $94.31. Monday’s preliminary quote rose another 37 cents to $94.68. Wholesale pork prices have exploded to the upside in the past week. Grocers are switching to pork characteristics at the meat counter. The path of least resistance for lean swine futures remains sideways to the upside in the near term.
China’s state planning agency issues an alert on falling pig prices
The agency says pork prices have now fallen into a critical “warning zone”. In response, the agency outlined plans for a second round of pork purchases for state reserves this year. According to a report by ReutersThe agency is also poised to keep a close eye on hog prices, continuing efforts to monitor both production capacity and hog prices. This approach aims to maintain stability in a crucial sector of China’s domestic economy.
USDA Hogs and Pigs report slightly negative
The USDA estimated that the U.S. hog herd was up 0.1% from a year ago to June 1, while traders had expected a 0.7% decline. All categories, except spring births and summer/fall intentions, came out better than expected. This may weigh slightly on summer and autumn/winter hog futures, although we doubt that the selling will be too heavy or sustained.
Chinese sow herd decreases
China’s sow herd decreased by 0.6 percent in May from the previous month to 42.58 million head, according to the country’s agriculture ministry. However, the sow herd was still 1.6% larger than in May 2022. China’s pig slaughter in May increased by 11% compared to a year ago. Pig slaughter in China in the first five months of this year surpassed year-ago levels by 9.9 percent.
Study: Plans to control an ASF epidemic in the US haven’t stopped its progress
A North Carolina State University study suggests that current US control measures may not be enough to completely halt the progress of an African swine fever (ASF) epidemic within 140 days. While measures taken, such as limiting animal movement and depopulation, managed to reduce the spread of ASF by almost 80% in computer simulations, only 20% of the virtual models had the virus completely under control by end of this period.
What the results mean. These findings, as pointed out by Gustavo Machado, an assistant professor of population health and pathobiology at the university, indicate that while ASF containment is possible, it may take longer than initially anticipated. The university is currently revising its simulation model with updated data and parameters to explore the possibilities of controlling the virus within various timescales.
The initial simulation, funded by the USDA and based on data from more than 2,000 real-world farms and past disease records, showed that close pig contact accounted for 71.1 percent of theoretical ASF cases. Other causes included indirect spread through contaminated transport (14.4%) and local transmission factors (14.6%).
The study also highlighted the role of pre-epidemic testing and screening measures. While the cost of testing every animal may be high, the United States should continue to improve existing surveillance measures and train more staff in sample collection and analysis. The study particularly recommended tighter controls for high-risk herds where animals congregate extensively, which could help detect and manage outbreaks earlier.
USDA Secretary Vilsack Announces Another Tranche of Meat Processing Spending
Every time Vilsack travels, millions of dollars are announced and that is the case today as he announces that $115 million will be distributed in 17 states in the form of 15 awards to increase meat and poultry processing capacity. This announcement will be made in Des Moines, Iowa.
The USDA-managed National Institute of Food and Agriculture will also award seven awards totaling $4.5 million to community and technical colleges to train meat processing workers. The industry has been facing labor supply issues.
The funding will be awarded as follows: The Meat and Poultry Processing Expansion Program will distribute five awards totaling $38 million to support smaller independent processors. The Meat and Poultry Interim Loan Program will provide ten awards totaling $77 million. Funding for the scholarships will be channeled through the Farm Workforce Training Program for Meat and Poultry Processing.
Next weeks likely high-low price trading ranges:
August Lean Hog Futures: $90.00 to $100.00 and with an upside bias
August Soybean Meal Futures: $400.00 to $425.00 and with a sideways bias
December Corn Futures: $4.90 to $5.25 and a sideways tilt
Lean Pork, Soy Meal, Corn Futures Latest Analytical Daily Charts
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