Cattle analyst Jim Wyckoff stocks world pig information
20 October 2023
8 minute learn
The tilt hog futures bears have the forged near-term technical benefit as December hogs this week hit a brand new contract low and costs are trending decrease at the day by day bar chart. That means the trail of least resistance for costs will stay sideways to decrease for the close to time period. Wholesale beef costs proceed to slide this week. The most recent CME lean hog index fell 45 cents to $81.15 (as of Oct.16). Many futures investors proceed to imagine weak point within the money hog marketplace will proceed within the coming weeks. Nonetheless-elevated farm animals feedlot costs and still-high red meat costs on the meat counter may just quickly put a flooring beneath the hog and contemporary beef markets, on higher substitution call for from the shopper.
Weekly USDA US beef exports gross sales
Beef: Internet gross sales of 30,700 MT for 2023 up 46 % from the former week and 10 % from the prior 4-week moderate. Will increase have been essentially for Mexico (9,100 MT, together with decreases of 200 MT), Japan (6,200 MT, together with decreases of 300 MT), South Korea (4,000 MT, together with decreases of 400 MT), China (2,000 MT, together with decreases of 100 MT), and Colombia (1,900 MT, together with decreases of 100 MT). General internet gross sales of 900 MT for 2024 have been for South Korea. Exports of 25,800 MT have been down 8 % from the former week and from the prior 4-week moderate. The locations have been essentially to Mexico (8,700 MT), Japan (3,800 MT), China (2,800 MT), South Korea (2,200 MT), and Canada (2,100 MT).
China beef imports plunge vs. year-ago in September
China imported 110,000 MT of beef all the way through September, equivalent to the quantity it introduced in all the way through August however 31.7% not up to ultimate yr. Beef imports during the first 9 months of this yr totaled 1.27 MMT, up 4.4% from the similar duration ultimate yr.
China’s Q3 beef output soars
China’s beef output within the 3rd quarter rose 4.8% from year-ago to twelve.69 MMT, the perfect for the quarter in a minimum of a decade. Beef output within the first 9 months of this yr rose 3.6% from the similar duration ultimate yr to 43.01 MMT. China’s hog herd rose to 442.29 million head on the finish of September, up 7.12 million head (1.6%) from the former quarter, however down 0.4% from ultimate yr.
USDA Cattle Outlook: October 2023
Beef/Hogs: USDA’s September Quarterly Hogs and Pigs reported a small build up in marketplace hogs, a modest decline within the breeding stock, and across-the-board discounts in farrowings —each precise (June–August) and manufacturers’ intentions for September–November and December–February. The June–August muddle charge used to be report excessive at 11.61 pigs consistent with muddle. New data from the September record means that 2023 hog costs will most probably moderate about $60 consistent with hundredweight (cwt) this yr on a complete beef manufacturing build up of about 1.1 %. In 2024, hog costs are forecast to moderate about $61 consistent with cwt on a complete beef manufacturing build up of two.2 %.
USDA sends ultimate rule on farm animals markets to OMB, objectives to advertise ‘inclusive pageant’
USDA submitted a last rule titled “Inclusive Festival and Marketplace Integrity Underneath the Packers and Stockyards Act” to the Place of work of Control and Price range (OMB). This rule encompasses “proposed revisions” to rules beneath the Packers and Stockyards Act (PSA), with the target of marketing inclusive pageant and marketplace integrity throughout the farm animals, meats, poultry and are living poultry markets. The Agricultural Advertising and marketing Carrier has clarified that the guideline comprises “supplemental amendments” geared toward defining habits that USDA considers “unfair, preferential, unjustly discriminatory, or misleading, and a contravention of the PSA.” It additionally seeks to explain standards and forms of habits that might be considered as “unduly or unreasonably preferential, superb, prejudicial, or disadvantageous, and violations of the Act, together with retaliatory practices that intervene with lawful communications, statement of rights, and associational participation.” Significantly, USDA has every other ultimate rule associated with transparency in poultry grower contracting and tournaments lately beneath overview at OMB. In spite of scheduled conferences concluding by way of past due September, it stays unsure when both rule can be printed, because the just lately submitted rule used to be firstly centered for finalization in September.
Smithfield prepares for US inventory list
Smithfield Meals’ Chinese language proprietor WH Crew is operating with banks to take the US-based beef manufacturer public once more in the United States, the Wall Boulevard Magazine reported, bringing up folks acquainted with the topic. “The corporate incessantly evaluates relisting Smithfield’s inventory in the United States, however there is not any time-table for it,” WH Crew stated in an emailed commentary to Reuters. Different primary meat corporations, like Brazil’s JBS, also are taking into consideration US. listings amid difficult stipulations within the trade.
China lifts FMD ban on some Russian areas
China lifted a ban on foot and mouth illness (FMD) for sheep, farm animals and pigs in 22 Russian areas. China’s ag ministry says farm animals and their merchandise from those areas that conform to Chinese language regulations are allowed to go into the rustic.
Iowa joins beef manufacturers in prison problem towards Massachusetts beef sale restrictions
Iowa has entered the prison fray by way of difficult a just lately enacted Massachusetts regulation that prohibits the sale of beef no longer assembly explicit hog-confinement requirements, in keeping with the Iowa Capital Dispatch. This prison motion comes as a part of an ongoing dispute involving beef manufacturers, together with Triumph Meals, who’ve sued the Massachusetts lawyer basic over the Prevention of Farm Animal Cruelty Act.
Key issues:
- Massachusetts’ Prevention of Farm Animal Cruelty Act restricts the sale and transportation of beef throughout the state, implementing strict hog-confinement requirements.
- The regulation is going past California’s identical regulation by way of additionally banning the shipping of non-compliant beef via Massachusetts to different states.
- The regulation objectives to forestall animal cruelty and support meals protection however has confronted opposition from beef manufacturers, who argue that the confinement requirements are inconsistent with trade practices and may just impose expensive burdens.
- Iowa, the main beef manufacturer and exporter in the US, filed an amicus transient supporting the beef manufacturers’ problem. The transient emphasizes the possible detrimental financial have an effect on at the state’s beef trade.
- The amicus transient argues that the Massachusetts regulation units a perilous precedent by way of permitting states to disrupt markets in response to political agendas and asserts that the regulation violates the United States Charter’s trade clause and import-export clause.
- Legal professionals for Massachusetts contend that a few of these prison arguments had been rejected in earlier courtroom instances, together with a Ideally suited Courtroom ruling involving California’s identical regulation.
Base line: The prison struggle facilities on whether or not states have the authority to enact regulations affecting interstate trade, probably impacting the beef trade and the sale of beef merchandise throughout state traces.
USDA Cattle and Poultry: International Markets and Business
Beef: In 2024, EU beef exports are anticipated to say no 25 % in comparison to 2019 and account for 15 % of manufacturing, down from 19 % in 2019. Along with rising regulatory burdens, EU swine manufacturers proceed to stand demanding situations controlling the have an effect on of African swine fever, which has resulted in discounts within the swine herd and restricted exports to a few markets. As manufacturing contracts, the percentage meant for home intake has grown on the expense of exports.
Main points on Beef: World manufacturing in 2024 is forecast just about unchanged yr over yr at 115.5 million lots as decrease manufacturing within the EU and China is most commonly offset by way of greater manufacturing in Brazil, Vietnam, and the US. EU beef manufacturing is forecast 2 % decrease yr over yr to 21.2 million lots. The EU sow herd persevered to say no in 2023 and is forecast at 10.3 million head in 2024, down 1 %. Feed costs have moderated and sector profitability advanced in 2023. On the other hand, vulnerable home call for and the loss of new export markets to switch China are anticipated to result in trade restructuring in 2024 as manufacturers search to align manufacturing with decrease general call for. China manufacturing is forecast 1 % decrease as vulnerable home call for has led to very large trade losses via maximum of 2023, encouraging manufacturers to cut back manufacturing. Brazil manufacturing is forecast 5 % greater yr over yr as hog costs mirror enlargement in various export markets, together with Mexico, Singapore, and the Dominican Republic and enter prices are anticipated to say no, resulting in advanced manufacturer margins.
Vietnam manufacturing is forecast to extend 5 % to three.7 million lots on recuperating home call for because of financial restoration following COVID-19 and potency positive aspects from trade funding and consolidation. World exports are forecast to extend 2 % to ten.4 million lots in 2024 as Brazil exports proceed to achieve marketplace proportion from EU and US beef merchandise, specifically in Japan, and Mexico. United Kingdom exports are forecast to extend 9 % as decrease enter costs and better pig costs are anticipated to result in larger provides to be had for export to the EU and China. World beef imports are forecast to extend by way of 1 % in 2024 with will increase from Hong Kong,
China and Japan greater than offsetting decrease imports from Taiwan and the UK. US manufacturing and exports: US manufacturing is forecast 2 % greater in 2024 to twelve.7 million lots on a robust build up to pigs consistent with muddle and falling feed prices. US exports are forecast to extend 3 % in 2024 on robust call for from Canada, the Philippines, and South Korea in addition to gaining marketplace proportion from the EU in China and Australia.
The following week’s most probably high-low value buying and selling levels:
December lean hog futures–$66.00 to $71.00 and with a sideways-lower bias
December soybean meal futures–$400.00 to $435.00, and with a sideways-higher bias
December corn futures–$4.67 3/4 to $5.10 and a sideways bias
Newest analytical day by day charts lean hog, soybean meal and corn futures
