Latest / Professional Ag Marketing Podcast / Bellies, Butts, and Hams | Hog Market Talk May 6th, 2026

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Bellies, Butts, and Hams | Hog Market Talk May 6th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Hog Market Talk Podcast.
• 0:05
  SPEAKER_00: Your weekly deep dive into hog market fundamentals, breaking news of industry and trading commodity futures and options involved to mental risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: Today is May 6th.
• 0:23
  SPEAKER_01: I've got Jeff here with us today.
• 0:25
  SPEAKER_01: How's it going, Jeff?
• 0:26
  SPEAKER_02: Yeah, I think it's going pretty good, Mike, but we're having a little bit of a tough day again in these uh, especially these front-end futures on the hogs.
• 0:33
  SPEAKER_01: Yeah, let's take a look at some of these futures here.
• 0:35
  SPEAKER_01: We've got June hogs here up on the board.
• 0:39
  SPEAKER_01: Uh a little bit of a concern, Jeff, if we keep going down below yesterday's type low level here, uh, kind of around that 99 and a half type level.
• 0:49
  SPEAKER_01: Yeah, we're we're pushing that pretty good today, aren't we?
• 0:52
  SPEAKER_02: We are.
• 0:52
  SPEAKER_02: Yeah, we were kind of hoping we were um out of the danger zone here.
• 0:56
  SPEAKER_02: Uh yesterday being a really powerful day.
• 0:59
  SPEAKER_02: Today we're right back at it on the sell side of it.
• 1:02
  SPEAKER_02: And yeah, I don't know.
• 1:04
  SPEAKER_02: It's uh tomorrow might be kind of interesting the way this is shaping up.
• 1:08
  SPEAKER_01: Recently, you could argue some of the uh hog trade probably yesterday had to do with the other cattle markets too, uh, maybe having a little bit of an influence on it.
• 1:17
  SPEAKER_01: But cattle are up today with the SP being up pretty hard today.
• 1:21
  SPEAKER_01: Uh a few of the news items to just kind of talk about there, I think, uh worth mentioning at least on some of these outside markets is we do appear to be trading them pretty hard today.
• 1:31
  SPEAKER_01: Um, if I look at something like uh something like this headline here, probably.
• 1:39
  SPEAKER_01: Yeah, this had a pretty good impact on things this morning, didn't it, Jeff?
• 1:43
  SPEAKER_02: Yeah, outside markets all pretty positive.
• 1:45
  SPEAKER_02: And like you say, that's been pushing the uh cattle market higher um for you know today for sure, maybe some yesterday already.
• 1:55
  SPEAKER_02: But unfortunately, the uh as us hog traders kind of get accustomed to it, oftentimes the hogs kind of forget to participate in some of those broader topics, Mike.
• 2:05
  SPEAKER_02: And today's certainly one of those days.
• 2:08
  SPEAKER_01: Yeah, not necessarily following along too much with uh with this action, but honestly, the the crude oil market that's playing along with it pretty well.
• 2:17
  SPEAKER_01: Uh we've been down about what, 10 today, probably here most of the day.
• 2:21
  SPEAKER_01: Equity's up 80, and then the grains have taken the brunt of it.
• 2:25
  SPEAKER_01: We're down 10.
• 2:26
  SPEAKER_01: It's kind of been holding there on D's corn down about nine, and the soybeans down about 15.
• 2:31
  SPEAKER_01: So bigger pullback versus what we've been seeing lately, anyways, out of this.
• 2:35
  SPEAKER_01: It's been a lot of up action uh here, real recently, hasn't it?
• 2:39
  SPEAKER_02: Yep.
• 2:40
  SPEAKER_02: And over in the hog side of things, you know, we've we've spent uh the last few days, Mike, really kind of trying to determine um is this market trading nearby fundamentals?
• 2:51
  SPEAKER_02: Uh is it trading the outside markets?
• 2:53
  SPEAKER_02: Today's a pretty good indicator it's not trading much on the outside markets.
• 2:57
  SPEAKER_02: Um, or is it or is it building in a little bit of concern over the Suda Arabians um situation that we saw developed there last Thursday, Friday, and then you know, with uh as far as those announcements that were coming out, and then Mexico um saying that they weren't gonna take our variety meats here on Monday.
• 3:18
  SPEAKER_02: Um, so we've been trying to kind of watch this market and determine, you know, which one of those factors is some of the biggest drivers.
• 3:27
  SPEAKER_02: Um it's been a little bit difficult to uh to determine, I guess, from day to day.
• 3:33
  SPEAKER_01: And that'd be uh what day was that that we traded Sud Arabies Friday?
• 3:38
  SPEAKER_02: Yeah, Friday we did right off the gate, right?
• 3:40
  SPEAKER_02: So we started off significantly lower.
• 3:42
  SPEAKER_02: We we come back uh and didn't close too poorly on Friday, kind of uh pushed it behind us, which kind of felt like the right approach to it.
• 3:51
  SPEAKER_02: You know, there um it's one of those things that you know, from our standpoint, at least it there wouldn't appear to be any reason to really price in some lower futures prices because of the the event.
• 4:03
  SPEAKER_02: Um, everything's very well um um you know situated as far as you know getting the pigs segregated and and quarantined and the testing protocols in place.
• 4:16
  SPEAKER_02: I mean, I sure don't expect us to continue to hear about additional positive cases.
• 4:20
  SPEAKER_02: You know, on a side note, that is one of the things that we would be watching pretty carefully here if we start seeing additional positive cases.
• 4:28
  SPEAKER_02: The market's gonna take that pretty hard.
• 4:30
  SPEAKER_02: Again, do not think that's gonna be a thing.
• 4:32
  SPEAKER_02: Seems like we're in really good shape as far as uh you know how the industry's dealing with this, and kind of a nice little uh I shouldn't say nice little, but uh a bit of a test run if we ever have a bigger issue.
• 4:44
  SPEAKER_02: This was one to get us warmed up on and versus some of the other big scary ones, right?
• 4:50
  SPEAKER_02: But um, so we're pretty happy with the way that's going.
• 4:53
  SPEAKER_02: Uh Mexico coming out talking about the variety meats, saying they don't want to take those anymore.
• 4:57
  SPEAKER_02: That's that's disappointing.
• 4:59
  SPEAKER_02: Um, obviously struggling to see much of the science behind that, right?
• 5:03
  SPEAKER_02: But uh yeah, it that's the other thing the market's gonna be watching again.
• 5:07
  SPEAKER_02: Think it's a small possibility of happening, but something that we're keeping in the back of our mind this week.
• 5:12
  SPEAKER_02: And would the market trade that?
• 5:14
  SPEAKER_02: Yeah, so we traded that on Monday.
• 5:17
  SPEAKER_02: Um, you know, that's the why we were kind of down a buck and a half um at that time.
• 5:22
  SPEAKER_02: And then yesterday, I think you know, each day that moves further um through this process, you you'll think about okay, if nobody else is making the announcements, if Mexico's not talking about taking any additional steps as far as cutting into the muscle cut shipments or anything like that, um, you feel better and better about it.
• 5:41
  SPEAKER_02: And I think that's been a lot of the back and forth that we've seen on Friday, Monday, and Tuesday.
• 5:46
  SPEAKER_02: So, you know, yesterday leaving the uh close at a buck 75 higher in a lot of these markets.
• 5:53
  SPEAKER_02: Um everybody feeling pretty good.
• 5:56
  SPEAKER_02: Haven't had any new news on the Suda Rabi piece.
• 5:59
  SPEAKER_02: Um, but then you know, switch over and talk about fundamentals for a minute here, Mike.
• 6:04
  SPEAKER_02: Uh just another day of lower cutout is really disappointing.
• 6:10
  SPEAKER_02: And and that's kind of what we've been struggling with here, maybe you know, more often than than the pseudorabies discussion.
• 6:18
  SPEAKER_01: So the lower cutout, do you think it's just uh are we a week early or is this?
• 6:24
  SPEAKER_01: I mean, the hog numbers have been plenty high recently, just in animals too.
• 6:28
  SPEAKER_01: But I mean, we've drifted away from 100 here just a wee bit, but normally from about right now, it really, as you can see on the chart there, it just really starts to go up normally from here.
• 6:38
  SPEAKER_02: Yep.
• 6:39
  SPEAKER_01: But what's holding it back so far?
• 6:40
  SPEAKER_01: And at what point do we get concerned, Jeff?
• 6:43
  SPEAKER_02: Yeah, uh you're hitting all the right points there, Mike.
• 6:46
  SPEAKER_02: And and like we've talked about on this podcast here a few weeks ago, is like uh, you know, no news starts to become bad news to this in in this environment, right?
• 6:56
  SPEAKER_02: And what I mean by that is a steady cutout when the June futures, uh, which you know is carrying a you know eight to sometimes twelve dollar premium to the nearby index, no, you know, steady cutout becomes uh a negative fundamental, right?
• 7:13
  SPEAKER_02: And that's kind of the environment that we have gotten ourselves into is you know, we we need to get some higher prints on the product values on the 602 in order to maintain the the premium that we have built into these futures markets.
• 7:29
  SPEAKER_02: Now, it's a normal premium, so you have to recognize that, but it's still a premium, right?
• 7:35
  SPEAKER_02: So clearly, if we continue to go flat on on cutout, um, and we'll talk about cash here in a minute, too.
• 7:42
  SPEAKER_02: Um, you know, those June futures are gonna keep experiencing weight.
• 7:47
  SPEAKER_02: So move into next, you know, into last night's print, and they're actually lower, um, gets to be pretty disappointed, obviously.
• 7:55
  SPEAKER_01: What would you say about just total numbers right now?
• 7:58
  SPEAKER_01: On numbers, it still seems like we're holding a little bit higher than we would have liked.
• 8:03
  SPEAKER_01: That should start to fade away pretty soon here, hasn't it?
• 8:06
  SPEAKER_02: That's definitely what we're hearing.
• 8:07
  SPEAKER_02: That's definitely the seasonality of this thing, Mike.
• 8:10
  SPEAKER_02: Uh, so folks that you know, as we've been scheduling some pigs, um, you know, we've we've continued to hear that, hey, uh next week we've got fewer hogs coming down the pipe than what we had last week type of thing.
• 8:23
  SPEAKER_02: So I do think that is turning.
• 8:25
  SPEAKER_02: And the cash market is representing that.
• 8:27
  SPEAKER_02: I know it didn't print anything yesterday, but come out the gate there on Monday and uh, you know, experiencing a similar high to what we saw last week.
• 8:37
  SPEAKER_02: Um, undertones of the market I think are quite positive.
• 8:40
  SPEAKER_02: I do think we're getting into a few less numbers.
• 8:42
  SPEAKER_02: It's just gonna take a little time for them to show up on on some of the charts that we watch.
• 8:46
  SPEAKER_02: And and weights will be continue to be a problem.
• 8:48
  SPEAKER_02: Um, or maybe that's a too strong a word, but they're gonna remain stubbornly high.
• 8:54
  SPEAKER_01: Seems like uh that story, at least I've got this screen loading for weights there, but they're gonna they're gonna stay pretty high just based on it's easier to keep feeding them at this at this level, cost gain-wise.
• 9:04
  SPEAKER_02: Margin overfeed's gonna be positive in my mind.
• 9:07
  SPEAKER_02: We're gonna try pretty hard to keep uh keep the heavy weights out there.
• 9:10
  SPEAKER_02: If if Packers flat run out of pigs, we've seen that happen in the past couple of years.
• 9:15
  SPEAKER_02: Um, then they've dug into their inventory a little extra hard, but um, we're definitely not in that situation today, right?
• 9:22
  SPEAKER_02: That might be a July-August type of conversation if it indeed happens.
• 9:26
  SPEAKER_02: Um, I do I do want to bounce back over to the product value side of things, Mike.
• 9:30
  SPEAKER_02: I think there's a few um individual primals that are worth studying because it is a bit of the world of have and have nots over there.
• 9:38
  SPEAKER_02: So if we start looking at you know, the belly market is the reason why the market was the average cutout was down yesterday and been the culprit a few different times here in the past uh few weeks.
• 9:50
  SPEAKER_02: So you can see that you know, been getting beat up a little bit down into that.
• 9:54
  SPEAKER_02: What is it, uh 130 bucks, um, 126 going home last night.
• 10:00
  SPEAKER_02: So pretty disappointing, but let's be honest, this is not going to be a primal that we have to be super concerned about um going forward.
• 10:08
  SPEAKER_02: The bellies are gonna take care of themselves.
• 10:10
  SPEAKER_02: So look at some of the halves, you'd switch over to the butt chart and uh you know, butts and ribs, um, really impressive.
• 10:19
  SPEAKER_02: Um, and uh, what I like about that, Mike, is you think about the seasonalities that we're dealing with here, right?
• 10:25
  SPEAKER_02: Um, we're just getting into May.
• 10:27
  SPEAKER_02: Uh, people are starting to get smokers out, graduations are happening.
• 10:31
  SPEAKER_02: Um, what I see is some of those nice domestic cuts that people use this time of year are reacting very nicely.
• 10:40
  SPEAKER_02: And the one that's uh a bit of a drag on the cutout is the belly.
• 10:44
  SPEAKER_02: So I I think there's some really nice undertones in the uh product values and the product movement here.
• 10:51
  SPEAKER_02: Um we're hoping just another week or two down the road and things will be all good, but we've been saying that for a few weeks too.
• 10:58
  SPEAKER_01: What other uh final thoughts do you got for our listeners here today, Jeff?
• 11:03
  SPEAKER_02: I think you know, continue to pay attention to the supply side, watch for that to turn, but you know, product values is what's gonna drive this thing.
• 11:11
  SPEAKER_02: So that's what we're gonna, that's what the markets, I think, really keying in on.
• 11:16
  SPEAKER_02: And that's probably what we need to be keying in on as well.
• 11:18
  SPEAKER_01: All right.
• 11:19
  SPEAKER_01: Sounds good.
• 11:20
  SPEAKER_01: And thank you to all our listeners out there.
• 11:22
  SPEAKER_01: Please click the link in the description below to uh reach our most recent market commentary and get a hold of us on our website as well.
• 11:30
  SPEAKER_01: So thank you all for tuning in today.