April lean hog futures experienced significant selling pressure on Wednesday, largely driven by profit-taking. However, historical trends show that the bulls in the hog market tend to be resilient, meaning a strong price recovery could be on the horizon in the near term. Despite the recent downturn, the market’s fundamental factors continue to suggest potential for further upward movement.
Pork Cutout Value and Belly Prices
On Wednesday, the pork cutout value dropped by $3.95 to $495.52, largely due to a significant decline in belly prices, which fell by $16.75. Over the past two days, the cutout has fallen by $6.95, primarily driven by a $27.00 drop in belly prices. This weakness in the pork cutout has raised concerns that the recent seasonal rally in hog futures might be stalling.
Despite this, the latest CME lean hog index showed strength, increasing by another 79 cents to $90.98 as of February 18. This continuing upward trend in the index highlights some resilience in the lean hog market, even amid current challenges.
USDA and Global Pork Industry Updates
New Marketing Campaign from the US National Pork Board
The US National Pork Board has launched a new domestic marketing campaign. The campaign is aimed at educating consumers about the future demand for pork, focusing on what drives consumption and celebrating the versatility and flavor of the product. According to an official from the National Pork Board, this initiative will showcase the various uses of pork and its appeal to future consumers. The campaign is set to kick off this spring.
US Pork Exports to Oceania
US pork exports to Oceania reached record highs in 2024, showing a 29% increase from the previous year. This brought the total exports to 102,747 metric tons (mt), marking the largest export volume since 2019 and the second-largest on record. The export value also rose dramatically by 32%, totaling $374.8 million.
Despite the limited market access for US pork in Oceania, the region continues to be an important destination for both raw materials and processed pork products. New Zealand, in particular, has shown a growing demand for US pork ribs, contributing significantly to the surge in exports. These figures underscore the strong and expanding presence of US pork in the Oceania market.
Price Trading Range Forecasts for the Coming Week
Lean Hog Futures
The likely high-low price trading range for April lean hog futures is expected to be between $84.50 and $94.75, with a sideways bias.
Soybean Meal Futures
March soybean meal futures are forecasted to trade between $290.00 and $305.00, also with a sideways-higher bias.
Corn Futures
The March corn futures range is predicted to be between $4.90 and $5.15, with a sideways-higher bias.
Conclusion
The lean hog futures market remains resilient, despite recent selling pressure and concerns about weakening pork cutout values. The market’s fundamentals, along with strong global demand for US pork, suggest that price recoveries are still possible in the near future. Meanwhile, the US National Pork Board’s new marketing campaign and the impressive growth in exports to Oceania further solidify the industry’s outlook for sustained demand. As market conditions continue to evolve, both the pork market and its stakeholders must remain agile to navigate potential fluctuations.
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