Hog Margin Watch: October Margins persevered to weaken over the primary part of October as hog costs have been secure to reasonably decrease whilst there was once a slight build up in projected feed prices. The USDA’s October WASDE record featured decrease manufacturing for each corn and soybeans with a tighter stability sheet for corn. Corn and soybeans each complex following the record and there’s a feeling that we could have already completed a harvest low. Hog
costs proceed to be confused through weak point in each the beef cutout and money hog marketplace. Final week’s beef cutout worth at $94.70/cwt. was once the bottom since overdue August-early September with the loin, rib, butt, ham, and abdominal primals all shifting decrease during the last few weeks. USDA reported beef export gross sales for the week finishing September 29 at 43,000 MT, the best possible since April with gross sales to Mexico 40% upper than the latest four-week moderate. August beef exports of 179,447 MT have been up 3.3% from closing 12 months even if September gross sales are anticipated to be down 5-7% from a 12 months in the past in accordance with the present tempo of shipments. Greater provides in This autumn are anticipated to spice up exports in October alternatively and export call for might be key to strengthen the marketplace. Remarkable beef export gross sales of 252,590 MT on the finish of September have been up 40% from closing 12 months and constitute 9.5 weeks of provide on the present cargo tempo. USDA’s FAS is forecasting 2024 international beef manufacturing to stay degree with 2023 as decrease output within the EU and China is offset through upper manufacturing in Brazil, Vietnam, and the U.S. FAS additionally famous that Brazil exports proceed to realize marketplace proportion from the U.S. and EU, in particular in Japan and Mexico. Our shoppers proceed focused on ranges to increase margin protection in deferred advertising and marketing classes whilst additionally comparing alternatives for changes to current positions.
The Hog Margin calculation assumes that 73 lbs of soybean meal and 5.3 bushels of corn are required to supply 100 lean hog lbs. Further assumed prices come with $44 according to cwt for different feed and non-feed bills.