Margins improved to start out the primary half of January as hog futures recovered from setting new contract lows whereas a bearish USDA report for corn and soybeans initiated a brand new leg down in each markets, with contemporary contract lows in corn. USDA raised yields for each the corn and soybean crops within the January WASDE report back to 177.3 and 50.6 bushels per acre, respectively, whereas decreasing harvested space for each crops by round a half million acres. Because of this, last manufacturing for each crops got here in increased than anticipated and out of doors the vary of pre- report expectations. Whereas corn feed use was raised 25 million bushels and ethanol demand was elevated by 50 million, ending shares nonetheless elevated 31 million bushels from December and above the typical of pre-report estimates. USDA raised 2023 pork manufacturing by 60 million bushels within the report from their December estimate, whereas 2024 manufacturing is now forecast at 27.985 billion kilos, up 240 million from the December estimate and a pair of.4% increased than final 12 months. USDA additionally raised the pork export forecast by 20 million kilos from December for each 2023 and 2024, with final 12 months’s exports projected up 6.7% from 2022 and this 12 months’s exports anticipated to exceed 2023
by 1.5%. Export gross sales and shipments have slowed down lately following the vacations, however excellent gross sales for the present 12 months are up sharply from a 12 months in the past to key markets corresponding to Mexico, Japan, and South Korea. This portends a powerful export marketing campaign in 2024,
though Brazil has expanded manufacturing and is predicted to supply extra competitors for U.S. pork within the new 12 months. Our purchasers proceed to observe alternatives so as to add margin protection in deferred advertising and marketing intervals with versatile methods.

The Hog Margin calculation assumes that 73 lbs of soybean meal and 5.3 bushels of corn are required to provide 100 lean hog lbs. Extra assumed prices embody $44 per cwt for different feed and non-feed bills.