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Hog Talk: H and P For Me · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Hog Market Talk Podcast with Professional Egg Marketing.
• 0:05
  SPEAKER_00: Come here to get fresh updates on what's happening week to week within the Lean Hog Complex.
• 0:10
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:16
  SPEAKER_00: And remember to visit swineweb.com, an excellent resource for information in the pork industry, where you can also find this podcast.
• 0:25
  SPEAKER_00: This is your host, Mike Miner.
• 0:26
  SPEAKER_00: Let's cross.
• 0:27
  SPEAKER_00: Today is September 26th.
• 0:29
  SPEAKER_00: I've got Luke with us here today.
• 0:30
  SPEAKER_00: How's it going, Luke?
• 0:31
  SPEAKER_02: You know, Mike, with uh the hog and pig report we got, fundamentals we got, new contract ties today we got.
• 0:37
  SPEAKER_02: I'd be remiss to say anything but pretty good, my friend.
• 0:40
  SPEAKER_00: I know.
• 0:41
  SPEAKER_00: Let's start with that HMP report.
• 0:43
  SPEAKER_00: Uh besides fireworks, what can you tell us about it?
• 0:46
  SPEAKER_02: Uh I mean, honestly, it uh I I I I mean there's there's really no way to cut it other than uh very friendly.
• 0:52
  SPEAKER_02: I mean, I I dare say from these high levels we're already trading, it was a bullish report, Mike.
• 0:57
  SPEAKER_02: Well what's most bullish about it?
• 0:58
  SPEAKER_01: What yeah, pretty pretty much everything.
• 1:01
  SPEAKER_01: I know that's not the right answer.
• 1:02
  SPEAKER_01: So it was a broad all the way across the board.
• 1:05
  SPEAKER_02: And I'll dive, I'll give a few just like high-level details.
• 1:08
  SPEAKER_02: I mean, we you know, one thing about Hogan Pig report, it's kind of it's it's it's kind of you know variance to estimates, right?
• 1:14
  SPEAKER_02: And we were, you know, a a few were really close to estimates, like maybe one category, if you will.
• 1:19
  SPEAKER_02: But I mean, we had up to you know 3.1 percent variance from estimates.
• 1:23
  SPEAKER_01: I mean, that that's a big number, right?
• 1:25
  SPEAKER_01: That's a pretty big miss for the HMP report.
• 1:27
  SPEAKER_01: Like placements on cattle, that one can be like six, seven percent.
• 1:30
  SPEAKER_02: And that's that's that's that's just that's that's variance from trade estimates.
• 1:34
  SPEAKER_02: Estimates, yes.
• 1:34
  SPEAKER_02: Right?
• 1:34
  SPEAKER_02: Not now now.
• 1:35
  SPEAKER_02: If you read the standard the disclaimers in the Hogan Pick report, they have a standard deviation of two to four percent anyway, right?
• 1:41
  SPEAKER_02: So keep that all in perspective.
• 1:42
  SPEAKER_02: But it no, I mean it's just we especially after having some good markets this summer.
• 1:46
  SPEAKER_02: It Mike, it was just really friendly and you know, high level.
• 1:49
  SPEAKER_02: I mean, the breeding herd uh came in underestimate and below a year ago at 98.2, so a smaller breeding herd, and you know, and smaller by uh you know, 1.3 from average trade estimate and 99.5.
• 2:03
  SPEAKER_02: Very friendly.
• 2:04
  SPEAKER_02: You know, all hogs and pigs came in at 98.7, you know, 1.7 below estimate, you know, very friendly.
• 2:11
  SPEAKER_02: You know, diving into just like the weight categories, you know, we we we have backed up a few pigs here recently.
• 2:17
  SPEAKER_02: We've been talking about it on these podcasts, not problematic, just we've backed a few up, we're cleaning them up.
• 2:23
  SPEAKER_02: So the two higher weight categories came in slightly over 100% of a year ago, the over 180 is at 100.3, uh the 120 to 179 is 100.4.
• 2:34
  SPEAKER_02: So again, that was expected.
• 2:36
  SPEAKER_02: Those were the two closest to estimates, but we're this, you know, kind of again the sourd underestimate, and then you get into the younger weight categories, the 50 to 119 at 97.7, 3.1 underestimate, under 50 at 97.6, 3.1 underestimate.
• 2:52
  SPEAKER_02: Um, the June-August pig crop 94, 97.4, 3.1 estimate.
• 2:58
  SPEAKER_02: I mean, it it really showed, I mean, from a macro picture, you know, stepping back.
• 3:02
  SPEAKER_02: I mean, not only do we have some amazing demand things going on, I'll hit on next, but I just it's it showed supply is very much in check.
• 3:10
  SPEAKER_02: Very manageable for the balance of the year, and with the fairing intentions and the under 50 categories, a really nice start into 2024, at least as what the HP projects uh into 2026.
• 3:22
  SPEAKER_02: I'm sorry, for for starting out the year with some favorable supply reactions.
• 3:25
  SPEAKER_02: And and the market traded that today, Mike.
• 3:27
  SPEAKER_02: I mean, we were you know, we were up uh two dollars and forty cents in the December, two twenty-five in the Feb, uh 217 in the April.
• 3:36
  SPEAKER_02: In fact, I think we made new contract ties today all the way out to June.
• 3:40
  SPEAKER_02: Um strong close too.
• 3:41
  SPEAKER_02: Yeah, strong close, strong trade really all day, right?
• 3:44
  SPEAKER_02: And uh, so uh, you know, again, when we you know, those of us in the pork industry, I like any egg commodity, we've had the ups and downs.
• 3:51
  SPEAKER_02: If we would have had, you know, three percent more, right?
• 3:54
  SPEAKER_02: We would have traded that.
• 3:54
  SPEAKER_02: We probably would have had the opposite reaction.
• 3:56
  SPEAKER_02: But but no, it was it was it was the there was no, I mean, with the the board where it was priced, the forward curve.
• 4:02
  SPEAKER_02: I mean, we had a favorable projection in this industry, but you know, this one just what it did to me with the way I look at it is it it just helped widen the runway a little bit.
• 4:10
  SPEAKER_02: Um it just it was a very you know, very, very friendly report, Mike.
• 4:14
  SPEAKER_02: There's just no other way to really dislice and dice that.
• 4:18
  SPEAKER_00: How about on some other categories right now, just deeper into fundamental on the hogs cutout?
• 4:22
  SPEAKER_00: What did that do today?
• 4:23
  SPEAKER_00: Because the midprint was pretty high here.
• 4:25
  SPEAKER_00: Uh it just came out a few moments ago on the afternoon.
• 4:28
  SPEAKER_02: It was, and then you know, maybe hopefully we saw the meat traders look at the hog and pig report and want to get just a little bit more current, right?
• 4:34
  SPEAKER_02: But nah, stepping back, we ended this afternoon midprint was high, but this afternoon's number uh was good, 250 higher at 113.50.
• 4:42
  SPEAKER_02: I'm rounding by a few cents, right?
• 4:43
  SPEAKER_02: But it's it is just an amazing value that we're seeing here.
• 4:47
  SPEAKER_02: Um, we've had cutout, just it's we're trading within a few dollars of summer type numbers, right?
• 4:52
  SPEAKER_02: And yeah, on top of, I mean the last three weeks, we've had two five and up close to two six kills, higher production, right?
• 4:59
  SPEAKER_02: And so just the fundamentals are are staying strong.
• 5:02
  SPEAKER_02: You know, maybe we're you know starting to get some of this benefit of you know the high cost of beef, you know, pork's helping uh just just demand is strong.
• 5:11
  SPEAKER_02: We we keep seeing it all the way across the chain.
• 5:13
  SPEAKER_02: The meat sales guys they keep saying, bring it on, we can sell it.
• 5:17
  SPEAKER_02: It's reflected in the 602 values.
• 5:19
  SPEAKER_02: You know, packers this week.
• 5:20
  SPEAKER_02: We you know, we ended the week a little softer, we always do, but started the week straight off, you know, a lot of 108s type trading, um, aggressive and wanting to fill up needs.
• 5:28
  SPEAKER_02: I mean, the the industry, it's just fundamentals for you know, September 26.
• 5:33
  SPEAKER_02: It's I mean, they're just they're just really, really good.
• 5:36
  SPEAKER_02: They're really, really unprecedented.
• 5:38
  SPEAKER_02: And and I, you know, I'd say one thing that you know you could maybe talk about and look at the Hogger Pig report, you know, we we have been carrying um some narrower spreads D forward, D's to Feb, D's to April, D's to June.
• 5:50
  SPEAKER_02: And so what that means is it's just it's keeping it close together.
• 5:53
  SPEAKER_02: You see that, you know, you see tighter spreads and really good front-end fundamentals and whatnot.
• 5:58
  SPEAKER_02: Um, but you you you know, you I would say from a macro perspective too, this this this will allow maybe Feb in April and June to advance a little bit more because it gave a little clearer picture, at least as far as the hog and picker goes, into the you know, into the 26th supply.
• 6:13
  SPEAKER_02: And I say all that, and I don't know if you can catch just a little bit of mixed messages.
• 6:17
  SPEAKER_02: I mean, the USDA report is a USDA report.
• 6:19
  SPEAKER_02: I'm not here to beat it up or all this or all that, but it's it's the best data we have.
• 6:23
  SPEAKER_02: But we all know it can have errors.
• 6:24
  SPEAKER_02: The last couple reports had errors, right?
• 6:27
  SPEAKER_02: Um, you know, we we have from an anecdotal perspective.
• 6:30
  SPEAKER_02: I mean, the the industry now is really full, and so it kind of had been looking from a supply perspective that you know maybe we had a few more pigs around, not less, as I get into you know, Q1 and Q2 of 26.
• 6:42
  SPEAKER_02: You know, that there's all kinds of functions.
• 6:44
  SPEAKER_02: It could be these few backed up pigs.
• 6:46
  SPEAKER_02: The big pigs are holding space up a little longer, waiting for the new ones to come, right?
• 6:50
  SPEAKER_02: But you know, on top of all that, you know, we've got a big time, I mean, record managed money positioned in hogs.
• 6:57
  SPEAKER_02: We got a protein bowl on the market, and you know, with with that, they I mean they just went and they bought all the way up today.
• 7:03
  SPEAKER_02: This this report, big traders look at this, we look at this, it it set a really good tone, a really good direction.
• 7:08
  SPEAKER_02: And you know, it's it's you know, we talk about we've been talking about the margins offered, which are amazing, unprecedented, and and all that good stuff.
• 7:16
  SPEAKER_02: We so we were good, and today we got a little good plus, you know, move into great, right?
• 7:21
  SPEAKER_02: Just uh it just helped the whole story.
• 7:23
  SPEAKER_02: So uh really happy with it, puts the industry in a really good spot.
• 7:27
  SPEAKER_02: You know, hopefully it can, like I mentioned, it can help with some of these deferred 26 contracts, help get some higher values out there, and just keep you know, keep giving our pork producers a longer runway to to hedge off margins that are that are really, really healthy for our business.
• 7:41
  SPEAKER_00: Awesome.
• 7:42
  SPEAKER_00: Well, thank you for taking the time to uh to come on the podcast today.
• 7:46
  SPEAKER_00: Uh share some knowledge on the HMP report and some of the current fundamentals going on in the hog market.
• 7:51
  SPEAKER_00: If they need anything, please reach out to us, ask for Luke Wells here at the office.
• 7:55
  SPEAKER_00: Uh we would appreciate the call.
• 7:56
  SPEAKER_00: Thanks, Luke.
• 7:57
  SPEAKER_00: Thanks, Mike.