Livestock analyst Jim Wyckoff shares world swine news
Lean hog futures have a solid near-term technical advantage as December hogs hit a new contract low this week and prices are trending lower on the daily chart. That suggests that the path of least resistance for prices will remain on the sidelines for near-term downside. Wholesale pork prices continue to decline this week. The latest CME lean hog index fell 45 cents to $81.15 (as of Oct. 16). Many futures traders continue to believe that weakness in the cash hog market will continue in the coming weeks. Still-high cattle feed prices and still-high beef prices at the meat counters could soon tax the pork and fresh pork markets with demand for better substitutes from the consumer.
Weekly USDA US Pork Export Sales
Pork: Net sales of 30,700 MT for 2023 were up 46 percent from last week and up 10 percent from the previous 4-week average. The increase was mainly in Mexico (9,100 MT, including a decrease of 200 MT), Japan (6,200 MT, including a decrease of 300 MT), South Korea (4,000 MT, including a decrease of 400 MT), China (2,000 MT, including a decrease of 100 MT). MT), and Colombia (1,900 MT, including a decrease of 100 MT). Total net sales of 900 MT for 2024 were for South Korea. Exports of 25,800 MT were down 8 percent from the previous week and from the previous 4-week average. The main destinations were Mexico (8,700 MT), Japan (3,800 MT), China (2,800 MT), South Korea (2,200 MT) and Canada (2,100 MT).
China’s pork imports fell in September compared to last year
China imported 110,000 tonnes of pork in September, equal to the amount it imported in August, but down 31.7% from last year. Imports of pork during the first nine months of this year amounted to 1.27 MMT, which is 4.4% more than the same period last year.
Chinese Q3 pork production rises
China’s pork output in the third quarter rose 4.8% from a year earlier to 12.69 MMT, the highest in a quarter in at least a decade. In the first nine months of this year, pork production increased by 3.6% year-on-year to 43.01 MMT. China’s pig herd grew to 442.29 million head at the end of September, up 7.12 million head (1.6%) from the previous quarter, but down 0.4% from a year earlier.
USDA Livestock Outlook – October 2023
Pork/pigs. USDA’s September quarterly Hogs and Hogs reported a small increase in marketable hogs, modest declines in breeding stocks and overall reductions in growth, both actual (June August) and producer intentions in September November and December February. The June-August litter rate was a record high of 11.61 pigs per litter. New information from the September report shows that 2023 hog prices are likely to average around $60 per hundredweight (cwt) this year on an overall 1.1 percent increase in pork production. In 2024, pork prices are projected to average $61 per cwt with overall pork production increasing by 2.2 percent.
USDA Submits Livestock Markets Final Rule to OMB Aimed at Promoting Inclusive Competition
USDA has submitted a final rule titled Inclusive Competition and Market Integrity Under the Packers and Stockyards Act to the Office of Management and Budget (OMB). This rule includes proposed revisions to the Packers and Stockyards Act (PSA) regulations with the goal of promoting inclusive competition and market integrity in the livestock, meat, poultry, and live poultry markets. The Agricultural Marketing Service clarified that the rule includes additional changes to define conduct that USDA considers to be unfair, preferential, unfairly discriminatory, or deceptive and a violation of the PSA. It also seeks to clarify the standards and types of conduct that will be considered unreasonably or unjustifiably privileged, beneficial, harmful or disadvantageous, as well as violations of the law, including retaliatory practices that impede lawful communication, assertion of rights, and participation in association. Notably, USDA has another final rule related to transparency in poultry contracts and tournaments that is currently under review at OMB. Despite the scheduled meetings ending in late September, it remains unclear when any of the rules will be released, as the recently filed rule was originally targeted for finalization in September.
Smithfield prepares for US stock listing
WH Group, the Chinese owner of Smithfield Foods, is working with banks to bring the US-based pork producer back into the US. Wall Street Journal reports, citing people familiar with the case. The company periodically evaluates the relisting of Smithfields shares in the US, but there is no timetable for this, WH Group said in an emailed statement. Reuters:. Other major meat companies, such as Brazil’s JBS, are also looking at the US. listings amid challenging industry conditions.
China lifts FMD ban in some regions of Russia
China has lifted the foot-and-mouth disease (FMD) ban on sheep, cattle and pigs in 22 regions of Russia. China’s Foreign Ministry says livestock from these regions and their products that comply with Chinese laws are allowed to enter the country.
Iowa joins pork producers in legal challenge to Massachusetts pork sales restrictions
Iowa is embroiled in a legal battle challenging a recent Massachusetts law that bans the sale of pork that does not meet specific standards for holding pigs. Iowa Capital Dispatch. The legal action comes as part of an ongoing dispute involving pork producers, including Triumph Foods, who are suing the Massachusetts Attorney General over the Farm Animal Cruelty Prevention Act.
- The Massachusetts Farm Animal Cruelty Prevention Act restricts the sale and transport of pork within the state by imposing strict standards for the housing of pigs.
- The law goes beyond similar legislation in California by also prohibiting non-compliant pork from being transported through Massachusetts to other states.
- The law is intended to prevent animal cruelty and improve food safety, but has faced opposition from pork producers who argue that the confinement standards are inconsistent with industry practices and could create costly burdens.
- Iowa, a leading U.S. pork producer and exporter, filed a friendly brief in support of the pork producers’ challenge. The brief highlights the potential negative economic impact on the state’s pork industry.
- The amicus brief argues that the Massachusetts law sets a dangerous precedent by allowing states to disrupt markets based on political agendas and claims the law violates the Commerce and Import-Export Clauses of the U.S. Constitution.
- Massachusetts lawyers argue that some of these legal arguments have been rejected in previous court cases, including a Supreme Court decision dealing with similar California legislation.
Bottom line: The legal battle centers on whether states have the authority to pass laws that affect interstate commerce, which could affect the pork industry and the sale of pork products across state lines.
USDA Livestock and Poultry. world markets and trade
Pork: In 2024, EU pork exports are expected to fall by 25 percent from 2019 to 15 percent of production, down from 19 percent in 2019. In addition to the increasing regulatory burden, EU pig producers continue to face challenges in controlling the impact of African pigs. fever, which has led to reductions in pig herds and restrictions on exports to some markets. Under the conditions of production contracts, the share intended for domestic consumption has increased at the expense of exports.
Details about pork. In 2024, global production is forecast to be almost unchanged year-on-year at 115.5 million tonnes, as lower production in the EU and China is largely offset by higher production in Brazil, Vietnam and the United States. EU pork production is forecast to be 2% lower year-on-year to 21.2 million tonnes. The EU herd continued to decline in 2023 and is forecast to reach 10.3 million head in 2024, down 1 percent. Food prices moderated and sector profitability improved in 2023. However, weak domestic demand and the lack of new export markets to replace China are expected to lead to industry restructuring in 2024 as manufacturers seek to match output with lower overall demand. China’s output is forecast 1 percent lower as weak domestic demand led to heavy industry losses through most of 2023, encouraging manufacturers to cut output. Brazil’s production is forecast to be up 5 percent year-over-year as hog prices reflect lower prices in a number of export markets, including Mexico, Singapore and the Dominican Republic, and input costs are expected to decline, leading to improved producer margins.
Vietnam’s production is forecast to increase by 5 percent to 3.7 million tons as domestic demand recovers, driven by economic recovery from COVID-19 and efficiency gains from industry investment and consolidation. Global exports are forecast to grow 2 percent to 10.4 million tonnes in 2024 as Brazilian exports continue to gain market share from EU and US pork, particularly from Japan and Mexico. UK exports are forecast to grow by 9 per cent as lower import prices and higher pig prices are expected to result in greater supplies available for export to the EU and China. Global pork imports are forecast to increase by 1 percent in 2024, with growth from Hong Kong,
China and Japan more than offset lower import levels from Taiwan and the United Kingdom. USA production and export. U.S. production is forecast 2 percent higher in 2024 to 12.7 million tons on higher pigs per liter and lower feed costs. US exports are forecast to grow by 3 percent in 2024, thanks to strong demand from Canada, the Philippines and South Korea, as well as market share gains from the EU in China and Australia.
Probable High Low Trading Ranges for Next Weeks:
December lean pork futures – $66.00 to $71.00 and biased lower
December soybean meal futures biased to $400.00 to $435.00 and higher
December corn futures – $4.67 3/4 to $5.10 and sideways bias
Latest Analytical Daily Charts for Lean Pork, Soybean Meal and Corn Futures
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