19 January 2024

4 minute learn

April lean hog futures costs have backed down from the January excessive, however that’s only a regular corrective pullback from current good positive factors. In reality, current worth motion on the every day chart reveals a bullish flag or pennant sample has fashioned. The most recent CME lean hog index is up one other 49 cents to $67.34 (as of Jan. 16), marking the sixth acquire within the final seven days. The index seems to have put in a seasonal low, posted firstly of January. Wholesale pork costs proceed to point out power, which is spectacular given the rise in provides following final week’s winter storm.

China’s December pork imports fall sharply from year-ago

China imported 90,000 MT of pork throughout December, unchanged from November however 54.3% lower than final yr. For 2023, China imported 1.55 MMT of pork, down 11.7% from the earlier yr.

China’s pork manufacturing reaches document in 2023

China produced a document 57.94 MMT of pork in 2023, official knowledge confirmed, after farmers ramped up slaughter over the last quarter to chop losses amid an oversupply of pigs. Annual pork output expanded 4.6% from the earlier yr, as slaughter rose 3.8% to 726.62 million head. Pork manufacturing within the fourth quarter totaled 14.93 MMT, up 7% from the identical interval in 2022. China’s beef output rose 4.8% to 7.53 MMT, poultry meat manufacturing rose 4.9% to 25.63 MMT and mutton elevated 1.3% to five.31 MMT in 2023.

In November, US pork exports reached new information in key markets

The surge in US pork exports is pushed by excellent performances in Mexico, Central America, and Colombia. These figures are based mostly on knowledge from USDA and compiled by the U.S. Meat Export Federation (USMEF).

Pork exports to Mexico, a number one market, reached a worth document in November, marking a 5% enhance from the earlier yr. Export quantity additionally surged by 14%, totaling 100,313 metric tons, making it the second-largest on document, with solely October 2023 surpassing it.

Central America noticed massive development in pork exports in November, with important will increase in Honduras, Guatemala, and El Salvador. Shipments to the area surged by 35% in comparison with the earlier yr, reaching 16,565 metric tons, setting month-to-month information.

South Korea additionally skilled substantial development in pork exports in November, up by 19% in comparison with the earlier yr, with shipments totaling 17,406 metric tons.

Oceania witnessed a notable rebound in pork exports all through 2023, and this development continued in November, with shipments practically tripling in comparison with the earlier yr, reaching 6,414 metric tons, which is a formidable 186% enhance.

By way of manufacturing, exports accounted for 30.1% of complete pork manufacturing in November, with muscle cuts making up 26.2%. Each figures elevated by roughly 1 proportion level in comparison with the earlier yr.

USDA report: livestock and poultry, world markets and commerce

Competitors Tightens for Main Pork Exporter

The revised 2024 forecast of pork shipments by U.S. and EU, the world’s prime two exporters, are practically on par for the primary time since 2015. U.S. and EU exports for 2024 are each revised decrease in comparison with the October forecast. Nevertheless, the hole is narrowed for these opponents as U.S. shipments are revised just one p.c decrease whereas EU shipments are revised 3 p.c decrease. The downward revisions for U.S. and EU exports are pushed by anticipated weaker shipments to China, the world’s largest importer.

Continued weak demand by China reduces export alternatives, significantly for the EU. Though U.S. export volumes to China stay a major a part of complete exports, U.S. share of exports to China is lower than for the EU. In 2022, U.S. shipments to China accounted for 10 p.c of complete exports, whereas EU shipments to China accounted for 27 p.c of complete exports. As well as, EU manufacturing has declined lately and is revised 2 p.c decrease in 2024, tightening exportable provides.

International pork manufacturing for 2024 is revised down 1 p.c from the October forecast to 114.2 million tons on decrease output in China, the EU, and Brazil. China manufacturing is revised decrease as continued weak demand discourages increasing home manufacturing. EU manufacturing is revised decrease on continued regulatory stress and altering shopper preferences. Brazil manufacturing is revised decrease as imports from prime market China proceed to weaken. U.S. manufacturing is just about unchanged with declines within the farrowings offset by elevated pigs per litter. International pork exports for 2024 are lowered 2 p.c from the October forecast to 10.2 million tons because the EU, United States, and Brazil more and more compete for decrease China imports. Though U.S. exports stay sturdy to many core markets, together with Mexico and Canada, combination exports are revised decrease in opposition to weak import demand from Japan and China. United Kingdom exports are additionally revised decrease on declining demand from the European Union.

China’s 2023 meat imports slip under year-ago

China imported 566,000 MT of meat throughout December, up 1.6% from November however practically 19% under year-ago. For 2023, China imports 7.38 MMT of meat, down 0.3% from the earlier yr.

The following week’s possible high-low worth buying and selling ranges:

April lean hog futures–$75.00 to $82.00 and with a sideways-higher bias

March soybean meal futures–$350.00 to $375.00, and with a sideways-lower bias

March corn futures–$4.35 to $4.60 and a sideways-lower bias

Newest analytical every day charts lean hog, soybean meal and corn futures