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Hog Talk: Cut It Out · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Hog Market Talk Podcast with Professional Egg Marketing.
• 0:05
  SPEAKER_01: Come here to get fresh updates on what's happening week to week within the lean hog complex.
• 0:10
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:16
  SPEAKER_01: And remember to visit swineweb.com, an excellent resource for information in the pork industry, where you can also find this podcast.
• 0:24
  SPEAKER_01: This is your host, Mike Miner.
• 0:26
  SPEAKER_01: Let's cross.
• 0:27
  SPEAKER_01: Today is May 22nd.
• 0:28
  SPEAKER_01: I've got Jeff with us here today to talk about the hog market.
• 0:31
  SPEAKER_01: How's it going today?
• 0:32
  SPEAKER_01: It's going pretty good, Mike.
• 0:34
  SPEAKER_01: Good.
• 0:34
  SPEAKER_01: Well, let's get a handle on where this hog market's been sitting.
• 0:39
  SPEAKER_01: Jeff, we've seen some ups and downs here recently on the cutout, a few other things here.
• 0:43
  SPEAKER_01: What do we got to focus on today?
• 0:46
  SPEAKER_00: I think the storyline of the hog market, you know, it's been true for a f maybe going on three, four weeks here, um, is the summer markets compared to where the front end fundamentals are.
• 0:56
  SPEAKER_00: So we've got some more to discuss on that today.
• 1:00
  SPEAKER_00: Um that storyline hasn't changed a lot, but yet uh the calendar keeps ticking.
• 1:05
  SPEAKER_00: We put another week under our belt with uh fairly lackluster, I would dare argue, um, performance coming out of the product values, Mike.
• 1:16
  SPEAKER_01: Cash seems to be keeping up though, from that perspective.
• 1:19
  SPEAKER_00: Cash market was probably impressive to us this week.
• 1:23
  SPEAKER_00: You know, we we did have some bids creeping really close to that hundred dollar mark.
• 1:29
  SPEAKER_00: Uh, so we have not seen that in the past.
• 1:31
  SPEAKER_00: Weighted average also performed a little bit better than what we were maybe anticipating.
• 1:36
  SPEAKER_00: Because what we do know is that we've got some pretty small kills being scheduled, you know, obviously for this week as we draw it to closer to a close here, um, especially going into next week with the holiday market.
• 1:48
  SPEAKER_00: So there's definitely a couple packers still looking for some pigs.
• 1:52
  SPEAKER_00: So, yeah, from a supply standpoint and uh cash as an indicator of that, we seem to be getting along just fine.
• 2:00
  SPEAKER_00: Um, one of the things that uh has kind of hit our radar this week and heard some others talking about it as well in the past couple weeks, but you know, we've got product um on the beef side really moving higher, don't we, Mike?
• 2:15
  SPEAKER_00: Yeah.
• 2:16
  SPEAKER_00: Um that pushing up into that 360 area, doing what it's supposed to do as far as you know, good domestic market um, you know, spiking higher right in front of the Memorial Day holiday is very seasonal for the beef market.
• 2:32
  SPEAKER_00: But it continues to raise the question of you know, will pork uh jump on the coattails and be able to jump on the coattails of the beef here anytime soon and start seeing some appreciation in value and some appreciation in demand.
• 2:48
  SPEAKER_00: And you know, another week kind of ticks by here of us looking at the products mix and you know, looking at loin market, looking at the bellies, they may perform better than the the other ones mentioned here, but ribs also would be another one that just been very lackluster, where in the past years we've seen some really nice signals of seasonal demand come from those products, especially right here towards the end of May, Mike.
• 3:16
  SPEAKER_00: And and that's not happening this year.
• 3:19
  SPEAKER_00: Um, we don't seem to be able to get a lot of tailwind coming from the beef market either.
• 3:25
  SPEAKER_00: At least this is all you know relatively short-term observations.
• 3:28
  SPEAKER_00: So maybe we go down six months in the rears or six months forward.
• 3:34
  SPEAKER_00: Maybe you can make a better observation to draw some correlation between the two.
• 3:39
  SPEAKER_00: But why I think all that important, and don't get me wrong, it it uh it's fine.
• 3:44
  SPEAKER_00: We've got hundred dollar product values, and I'm I'm sure they'll can they'll be able to continue to elevate to some extent, um, as we especially as we cut the kills back a little.
• 3:55
  SPEAKER_00: But let's face it, if when we got futures pushing, you know, over a dollar on the June, which is you know less than a month away now, one oh we pushed uh July and August up over 103, tapped around at 104 this week again, that takes something a lot more special than what we're currently seeing on the on the product side of things, on the cutout side of things.
• 4:20
  SPEAKER_00: And that's that really becomes our uh one of our biggest concerns is there's good premium in those summer futures yet.
• 4:29
  SPEAKER_00: Uh, and I just we are not seeing the activity out of product values that we are going to need to support those type of futures, Mike.
• 4:39
  SPEAKER_00: And that's why that topic continues to be front and center for us.
• 4:44
  SPEAKER_00: Um as we get through May, you know, I think we'll become more and more bold with our observations of hey, this is a really good market, but we might be a little ways away from being great.
• 4:57
  SPEAKER_01: Well, we are just uh it seemed like we were allergic to breaking over 100 bucks there.
• 5:02
  SPEAKER_01: We did just spend now, this is our fifth straight day above a hundred uh after this afternoon's cutout.
• 5:08
  SPEAKER_01: So it it at least took that out for the time being, but it sure doesn't want to get above it a whole lot.
• 5:13
  SPEAKER_01: That next ten dollars seems like it's coming awfully hard on that cutout, doesn't it?
• 5:17
  SPEAKER_00: And only a few dollars higher back to where you were about the first of February.
• 5:21
  SPEAKER_00: Yeah.
• 5:22
  SPEAKER_00: So and and again, 90 upper 90s for February, that's fantastic.
• 5:27
  SPEAKER_00: Don't get me wrong, but I think we gotta be really careful and manage our expectations as we roll into the next few months.
• 5:35
  SPEAKER_00: And you know, even if we end up being in this, you know, let's see if we can get to a hundred dollar index, for example.
• 5:41
  SPEAKER_00: That's that's a that's a great market, it's good market, um, especially with four and a half to four seventy dollar, you know, corn.
• 5:48
  SPEAKER_00: Um, my biggest issue with it is we'd sure like to get some hedges on in those winter months at at higher values than what we're currently trading.
• 5:58
  SPEAKER_00: Um not saying that those that the bat those values are bad either.
• 6:02
  SPEAKER_00: It's just um a lot of us a margin thing.
• 6:06
  SPEAKER_00: Yeah, I mean we yeah, margins are good out there, even straight revenue values like that December at 79, it's that's good.
• 6:14
  SPEAKER_00: Uh maybe not great type of thing.
• 6:16
  SPEAKER_00: So if we're gonna push those into the 80s, which that would be awesome, that would be in the great category.
• 6:24
  SPEAKER_00: Um, you know, we're gonna have to have something better than kind of$100 to$102 index here in the summer, I'm afraid.
• 6:31
  SPEAKER_00: So we're gonna need something in more than that$105, and I just think that's gonna be very challenging based on everything that we've saw so far.
• 6:40
  SPEAKER_01: All right, any final thoughts for our listeners here this week on the Hog Market Talk podcast?
• 6:45
  SPEAKER_00: Well, we'll get into next week.
• 6:46
  SPEAKER_00: Uh hopefully I'm wrong about those observations that we're just making.
• 6:49
  SPEAKER_00: Maybe we'll get past Memorial Days.
• 6:51
  SPEAKER_00: The shelves will be empty of everything pork, Mike, and they'll come back with a bunch of gusto buying up the product.
• 6:57
  SPEAKER_00: We can we can cross our fingers, huh?
• 6:59
  SPEAKER_01: That is the hope, anyways.
• 7:01
  SPEAKER_01: All right, thank you for joining us on the Hog Market Talk Podcast.
• 7:04
  SPEAKER_01: I appreciate it, especially now that we've got our three podcasts all under one show of professional ag marketing here.
• 7:10
  SPEAKER_01: So thank you for joining us, and we'll have a good one.
• 7:13
  SPEAKER_01: See you next week.
• 7:14
  SPEAKER_01: And thank you to all our listeners.
• 7:16
  SPEAKER_01: Please reach out to us at professionaleggmarketing.com.
• 7:19
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 7:24
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 7:30
  SPEAKER_01: See you next time.