Latest / Professional Ag Marketing Podcast / Risk off Hogs, Risk on Financials | Hog Market Talk April 16th, 2026

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Risk off Hogs, Risk on Financials | Hog Market Talk April 16th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Hog Market Talk Podcast.
• 0:06
  SPEAKER_00: Your weekly deep dive into hog market fundamentals, breaking news and industry influence.
• 0:12
  SPEAKER_00: Trading commodity futures and options involved deficient risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_01: Today is April 16th.
• 0:23
  SPEAKER_01: I've got Luke with us here today.
• 0:25
  SPEAKER_01: How's it going?
• 0:26
  SPEAKER_01: It's going good, Mike.
• 0:27
  SPEAKER_01: It's a beautiful day up here in Laverne, Minnesota.
• 0:29
  SPEAKER_01: It is really nice, just a little bit of nice weather before we go back to some cold here this weekend.
• 0:35
  SPEAKER_01: Just for a few days, though, right?
• 0:36
  SPEAKER_01: Only a few days, but it is enough, seems like, to keep half the folks out of the field.
• 0:41
  SPEAKER_01: Uh still pretty quiet out there compared to what I probably thought it would be with this type of weather this time of the year, so uh we'll see.
• 0:48
  SPEAKER_01: But it is starting to pick up a little bit here in southwest Minnesota.
• 0:52
  SPEAKER_01: Uh you go west, it's still a little dry.
• 0:54
  SPEAKER_01: You go south too far, as most of Iowa, it seems like, is still waiting to get into the field.
• 1:00
  SPEAKER_01: And same with eastern Minnesota.
• 1:02
  SPEAKER_01: Pretty wet over there from the folks we talked to, Luke.
• 1:05
  SPEAKER_02: Yeah, for sure.
• 1:06
  SPEAKER_02: For sure.
• 1:06
  SPEAKER_01: What do you think about this hog market?
• 1:07
  SPEAKER_01: I wanted to start here today talking about the hog market with just uh let's talk about the June chart a little bit, talk about the sell-off we've had.
• 1:16
  SPEAKER_01: What do you see going on with futures right now?
• 1:18
  SPEAKER_02: Yeah, I I would say I think there's two lenses you can look through the hog market right here.
• 1:23
  SPEAKER_02: You can look at the near term, which things are flat to clearly soft in the futures market, right?
• 1:28
  SPEAKER_02: And then you can maybe look a little further out.
• 1:29
  SPEAKER_02: I'll kind of walk through a storyline with this, okay?
• 1:32
  SPEAKER_02: Right?
• 1:33
  SPEAKER_02: So, I mean, the June contract, we were holding quite a premium to spot fundamentals for quite a while.
• 1:38
  SPEAKER_02: Gave us some great hedging opportunities, right?
• 1:41
  SPEAKER_02: I'm not trying to say we don't go back up to contract highs, especially in the July or the August or things like that, right?
• 1:46
  SPEAKER_02: But we're in the here now, April expired yesterday.
• 1:49
  SPEAKER_02: I mean, yes, technically May is the front month, but uh light volume at June, a lot of June hedges out here, all that.
• 1:55
  SPEAKER_02: Um, and as you kind of you know, look at the different components, let's look at hog harvest first.
• 2:00
  SPEAKER_02: You know, the past eight weeks we have harvested 0.7 percent, so just shy of a percent more pigs than a year ago.
• 2:07
  SPEAKER_02: Um, you know, we look at the next, you know, this week and we look at next week.
• 2:11
  SPEAKER_02: We this week is gonna be somewhere north of 2.5.
• 2:14
  SPEAKER_02: We threw we think next week.
• 2:16
  SPEAKER_02: So still plenty.
• 2:17
  SPEAKER_02: Yeah, somewhere a little under 2.5, high two fours, two four, something like that.
• 2:21
  SPEAKER_02: And again, those aren't burdensome numbers, Mike, but they're it's still got some pork to move through the system.
• 2:26
  SPEAKER_02: Um, and you know, kind of come into the cash market.
• 2:29
  SPEAKER_02: Cash market's just been rinse and repeat.
• 2:31
  SPEAKER_02: I mean, it's just right around index.
• 2:32
  SPEAKER_02: You had I think 92.50 top, a lot of 91s, several packers looking for pigs, nobody pressing pigs.
• 2:39
  SPEAKER_02: But from perspective too, having cash above index, that's that that's that's that's not bad, right?
• 2:44
  SPEAKER_02: Um uh cutout, you know, cutout keeps trying to want to show some life.
• 2:48
  SPEAKER_02: We went up to 99 the other day, then back down to about 95 or 6 or wherever, and we'll see where this afternoon prints out.
• 2:56
  SPEAKER_02: But you know, kind of what we've been hearing on that, uh, you know, on the cutout is is uh you know, bellies have been performing really, really well.
• 3:03
  SPEAKER_02: Probably masking when the hams dropped, hams dropped all the way down to 70.
• 3:06
  SPEAKER_02: They've rallied past that now.
• 3:08
  SPEAKER_02: I mean, 85, 88, 85, I think 86 midday here today, too.
• 3:12
  SPEAKER_02: Um, but you know, kind of in the short term, kind of coming back to where I said 0.7% more pigs last eight weeks, reasonable.
• 3:20
  SPEAKER_02: I mean, not small kills the next two weeks.
• 3:22
  SPEAKER_02: We're hearing just like in the meat market, plenty of hams around.
• 3:25
  SPEAKER_02: Not that they're super soft, right?
• 3:27
  SPEAKER_02: But probably sideways, maybe slightly lower trend.
• 3:30
  SPEAKER_02: You know, bellies have been pretty high priced.
• 3:32
  SPEAKER_02: Uh, that's been a good thing.
• 3:33
  SPEAKER_02: We're hearing plenty of belly, and belly was a big drop yesterday, 15 bucks lower, just needing to clear some bellies out.
• 3:39
  SPEAKER_02: So, you know, all putting a little bit of pressure on this.
• 3:42
  SPEAKER_02: So, what the June contract has done, um, you know, we had you know the 104, which we blew through, right?
• 3:47
  SPEAKER_02: And then that 102 type level was 200-day moving average.
• 3:51
  SPEAKER_02: So there's your technicals and all that.
• 3:52
  SPEAKER_02: But another way to maybe look at it more from a fundamental perspective is I came back, we had a pretty good premium to spot fundamentals in the June.
• 4:00
  SPEAKER_02: You know, right here today, June basis is like 11 and seven cents.
• 4:05
  SPEAKER_02: Call it 11 bucks, right about five-year average normal, that 11, 12 minus, that's a very normal basis.
• 4:11
  SPEAKER_02: So, with that, the futures market, they've taken the premium out.
• 4:14
  SPEAKER_02: They've really not discounted it relative to spreads, right?
• 4:18
  SPEAKER_02: But they're all waiting in anticipation.
• 4:20
  SPEAKER_02: It's just as we get into early May and mid-May, we think we're gonna get back down to two, four type kills.
• 4:25
  SPEAKER_02: So does the rest of the market.
• 4:26
  SPEAKER_02: But they just they they they need to see that move.
• 4:29
  SPEAKER_02: We need to see that come.
• 4:31
  SPEAKER_02: Um, so you know, I think that's kind of explains kind of this sell-off in the June.
• 4:35
  SPEAKER_02: It's pretty logical to us, but where I'm going with this, the hog market still has optimism, it it still wants to hold a premium in this thing.
• 4:42
  SPEAKER_02: You've got July at 104.35 today, August at 104 holding, you know, a little higher values.
• 4:48
  SPEAKER_02: You know, you go to the D'$82.50, 47 and a half settle.
• 4:53
  SPEAKER_02: Yeah, not at the 85 and a little better contract dies, but not the sell-off like we've seen in the June contract.
• 4:59
  SPEAKER_02: Why is that?
• 5:00
  SPEAKER_02: Uh, because I think uh the demand still stays really good.
• 5:04
  SPEAKER_02: Pork still prices in great.
• 5:06
  SPEAKER_02: Um, you know, we've got our summer supply reduction coming.
• 5:09
  SPEAKER_02: You know, wean pigs are still bringing plenty relative to margins.
• 5:13
  SPEAKER_02: Um, wean pig market demand is still really hot.
• 5:16
  SPEAKER_02: And so just what it's the market's saying, hey, we we need this front end to start to go, which again, this is just that flat time when we usually don't do too much, right?
• 5:25
  SPEAKER_02: We need to get into those seasonally adjusted lower supplies, uh, and then we'll have something to build on, right?
• 5:31
  SPEAKER_02: And so you'll even look out, you know, into April.
• 5:33
  SPEAKER_02: April's a good example.
• 5:34
  SPEAKER_02: I mean, it's right around 90 bucks.
• 5:36
  SPEAKER_02: I'm rounding a little bit.
• 5:37
  SPEAKER_02: It's just been pretty flat performance, right?
• 5:39
  SPEAKER_02: So the hog market's saying, hey, we need to get a little more going up front.
• 5:43
  SPEAKER_02: We need to kick this thing off.
• 5:45
  SPEAKER_02: So we've constricted this premium down just a little bit.
• 5:48
  SPEAKER_02: Um, and that's all right, having a little bit of pullback in the summer markets here short term.
• 5:52
  SPEAKER_02: I know a lot of our clients are got the hedges on in the summer.
• 5:54
  SPEAKER_02: So manage your hedges, reposition your hedges, get an opportunity to lift some hedges.
• 5:59
  SPEAKER_02: Um, you know, and then further out in the deferreds, we still hold some optimism, um, you know, and and think we'll get some nice things kind of moving back toward towards us.
• 6:07
  SPEAKER_02: And then, you know, you look out really, you look at April 27 at 90, which just happens to be really close to where this April, which was a great year, went off the board, right?
• 6:17
  SPEAKER_02: And then you've got next summer's, you know, above 100, you know, um, which is really close to where this June's trading at, right?
• 6:24
  SPEAKER_02: Just a little bit under.
• 6:25
  SPEAKER_02: So further out, still has some optimism.
• 6:27
  SPEAKER_02: So we maintain, we're we're excited about this pork market.
• 6:30
  SPEAKER_02: Um, you know, we want to make sure we watch the corn side.
• 6:33
  SPEAKER_02: We still like covering corn with options, of course, and you know, but you know, extend this, you know, put some floors in, look further out in this.
• 6:40
  SPEAKER_02: And and yeah, I think give this thing a few weeks here.
• 6:43
  SPEAKER_02: We get into May and we get a little deep, you know, mid-May.
• 6:46
  SPEAKER_02: I think we got some good things kind of coming at us.
• 6:48
  SPEAKER_02: Um, uh, you know, only thing that scares me about all this is I think everybody else does too, including the market, the way it's trading, right?
• 6:54
  SPEAKER_02: But uh no, I I think we got still some a really good fundamental baseline underneath this port complex.
• 7:00
  SPEAKER_01: Anything else on the hog market here?
• 7:02
  SPEAKER_02: No, I think that kind of ties up what I wanted to cover there, sir.
• 7:05
  SPEAKER_01: Awesome.
• 7:06
  SPEAKER_01: Uh the cattle market, pretty good sell-off today, but we've been pushing that right up to old contract ties in some of these months, depending on what you're looking at there.
• 7:14
  SPEAKER_01: So really strong beef market lately.
• 7:17
  SPEAKER_01: Uh, getting that time of the year where on that market as well, we're gonna be looking forward to grilling season and seeing what impact that has on the beef market uh along with the uh the pork cutout as well.
• 7:27
  SPEAKER_01: So we're really looking forward to I'd probably mark up uh what May May 10th.
• 7:32
  SPEAKER_01: We really really better be starting to see some movement in those products, I think, Luke.
• 7:36
  SPEAKER_02: Yeah, I think so.
• 7:37
  SPEAKER_02: I think so, but still already, I mean, at pretty high and elevated levels, right?
• 7:41
  SPEAKER_02: That they are.
• 7:42
  SPEAKER_02: You know, it's just that for protein, protein all in all, the beef, uh uh pork, uh poultry meat, chicken.
• 7:50
  SPEAKER_02: I mean, all just proteins in a we're in a good spot of the cycle, sir.
• 7:54
  SPEAKER_01: That you are.
• 7:54
  SPEAKER_01: Uh a few other things outside of those markets.
• 7:57
  SPEAKER_01: You're looking at the grains kind of directly, down just a couple pennies today.
• 8:02
  SPEAKER_01: Uh, the December corn, 476.
• 8:04
  SPEAKER_01: We've seen a lot of weakness in those front months.
• 8:06
  SPEAKER_01: I think just a billion bushels more of extra corn in the countryside is holding down some of these nearby months.
• 8:12
  SPEAKER_01: Further out, though, 476 on deceas kind of the middle of the range we've been at here.
• 8:16
  SPEAKER_01: It's waiting to see what's going to happen with this Iran conflict, which looks like Lebanon and uh and Israel maybe got something worked out for a ceasefire here in the near term, but still very um very much ongoing.
• 8:28
  SPEAKER_01: But it it feels like that is starting to de-escalate uh a little bit here in the Iran conflict situation.
• 8:34
  SPEAKER_02: Well, I do think, I mean, from my perspective, I mean, uh obviously the ceasefires a week ago or whatnot didn't work.
• 8:40
  SPEAKER_02: Um uh a blockade, which is last weekend straight, that's better than additional bombing or ground troops, right?
• 8:46
  SPEAKER_02: So, I mean, all in all, the market, the financials, if you look for much the Dow, the Nasdaq, the SP, I mean, it's been a risk on environment.
• 8:53
  SPEAKER_02: Wow, what a rally back.
• 8:54
  SPEAKER_02: Yeah, really, and I do think, I mean, it's it's this is a better outcome than more destruction.
• 9:00
  SPEAKER_02: Now, the interesting thing about all this, and I guess we don't want to get too much in the weeds here, but um, you know, it also not that China wasn't in this deal before, but you know, the possibility of of of blocking or stopping some Chinese ships, um, it just it adds another interesting recall into this global mix we've got here.
• 9:16
  SPEAKER_02: And and again, I mentioned on the you know, on the hog side, we we we we we want to protect that corn price because we're we're we're we're still dancing on some eggshells here.
• 9:25
  SPEAKER_02: There's still still lots of things moving around.
• 9:27
  SPEAKER_02: It's still a lot of moving pieces.
• 9:28
  SPEAKER_01: Yeah, when you look at some of these outside markets, uh the money doesn't seem that concerned yet.
• 9:33
  SPEAKER_01: Like normally copper will get really concerned, and that's been running much higher here recently.
• 9:38
  SPEAKER_01: The SP 500's back over 7,000 again.
• 9:41
  SPEAKER_01: Crude oils drifted back into the low 90s on front month, uh, just kind of in a middle ground to see what's gonna happen there.
• 9:48
  SPEAKER_01: So uh the market seems like it's the calm before the storm either direction from these price levels.
• 9:54
  SPEAKER_01: A lot of those outside markets, I think, Luke.
• 9:56
  SPEAKER_02: Yeah, for sure.
• 9:57
  SPEAKER_01: All right.
• 9:57
  SPEAKER_01: Well, thank you for coming on the show today.
• 9:59
  SPEAKER_01: Uh, everyone else, thanks for tuning in today.
• 10:02
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• 10:09
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