Latest / Professional Ag Marketing Podcast / Hog Spread Action | Hog Market Talk April 22nd, 2026

Transcript

Hog Spread Action | Hog Market Talk April 22nd, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Hog Market Doc Five.
• 0:05
  SPEAKER_00: Your weekly brief time with the Hard Market Fundamental.
• 0:21
  SPEAKER_01: All right, and thanks for tuning in again today.
• 0:23
  SPEAKER_01: Reminder, click the link in the description to sign up for any of our daily market commentary, get fast insights into the egg markets and more.
• 0:30
  SPEAKER_01: Also check out our website at professionaleggmarketing.com.
• 0:33
  SPEAKER_01: Jeff, I got you here today.
• 0:35
  SPEAKER_01: We're going to talk about the hog market.
• 0:37
  SPEAKER_01: Some interesting futures activity here lately.
• 0:39
  SPEAKER_01: What do you got to say about that?
• 0:40
  SPEAKER_02: Well, I yeah, I've been really impressed here the past few days.
• 0:45
  SPEAKER_02: Um I think most people have been, but um, you know, we'll we can dive into the technical side of the things here in a minute, but you know, that was definitely a portion of our issue last uh 10 days or so, right?
• 0:58
  SPEAKER_02: Um, as we continue to pound on the technical side of the thing last week.
• 1:02
  SPEAKER_02: And then in my mind, um, Mike, and I value your opinion on the subject too, but in my mind, we were able to put in a pretty big low last Friday.
• 1:12
  SPEAKER_02: Um had that June market push all the way down towards a hundred bucks.
• 1:17
  SPEAKER_02: Um started the week here on Monday with a quite a bit higher low, and lower or a higher lower than the previous day closed.
• 1:26
  SPEAKER_02: I think a lot of things kind of helped out as far as uh making that chart look quite a bit better.
• 1:32
  SPEAKER_02: Um and what I thought was really impressive, and I think the market had to pull back a little bit today because of this on the front end at least, is that big gap open that we saw yesterday morning, um Tuesday morning.
• 1:46
  SPEAKER_02: You know, really the only excuse I could come up with that is maybe the charts were starting to heal up a little bit.
• 1:51
  SPEAKER_02: Um, then obviously we had that higher product value there come out Monday night.
• 1:57
  SPEAKER_02: Um, and but you know, buck fifty higher off not really a lot of information, Mike.
• 2:05
  SPEAKER_02: Um that's pretty impressive.
• 2:07
  SPEAKER_02: To me, that's a signal some money wants to come into this marketplace.
• 2:11
  SPEAKER_02: Yeah.
• 2:12
  SPEAKER_01: Seems like that money didn't want to go into the June month today specifically, like we mentioned there.
• 2:17
  SPEAKER_01: That was still down half a buck, but uh that did have a really nice gap open there still uh Monday, but um or uh Tuesday.
• 2:25
  SPEAKER_01: But the uh the back months a lot a lot more friendly here today.
• 2:30
  SPEAKER_01: Front month, June, down half a buck.
• 2:32
  SPEAKER_01: The back months, so those are up over a buck in a lot of those.
• 2:35
  SPEAKER_01: So what what's going on spreadwide?
• 2:37
  SPEAKER_01: Like, what's that telling us about front-end fundamentals?
• 2:40
  SPEAKER_01: Are there a lot of pigs still?
• 2:41
  SPEAKER_01: Um, versus what what do we think going further out here?
• 2:44
  SPEAKER_01: Because they obviously want to help eye some pigs at these levels, it sure looks like.
• 2:48
  SPEAKER_02: I I think it's a combination of some pretty important developments here.
• 2:53
  SPEAKER_02: Um, one from a fundamental standpoint, and uh you know let's think about that here for a moment.
• 2:59
  SPEAKER_02: So, you know, we do have plenty of hogs around right here for the moment, um, and you know, got an index that probably will start to rally some, but it's been flat forever.
• 3:11
  SPEAKER_02: Product values that have been relatively flat since uh back into February.
• 3:18
  SPEAKER_02: Um, but the you know, this most recent activity as far as the cutout goes, you know, we'll start bringing out the index sum.
• 3:28
  SPEAKER_02: Um you know, we've got we think that'll for sure get over$92, maybe creep it on 93 even.
• 3:35
  SPEAKER_02: So that starts to put things like you know, May pretty close to where the current fundamentals are at.
• 3:42
  SPEAKER_02: But June's still holding you know a pretty large premium to the nearby fundamentals, but not uh inconsistent with history, I guess is the way I would describe that, Mike.
• 3:53
  SPEAKER_02: So I'm not suggesting June has a ton of extra premium in it, but it still has that premium to the nearby futures, and that's when I look at yesterday's activity with that big bump higher being so impressive that just pulled away from the nearby stuff in a big way.
• 4:11
  SPEAKER_02: And so what you're seeing is that June market having to come a little bit closer to reality here in my mind.
• 4:17
  SPEAKER_02: And I think you're also looking at the nearby fundamentals, right?
• 4:20
  SPEAKER_02: Like the supply side of this thing, we're not quite out of the woods yet.
• 4:24
  SPEAKER_02: We put together a little over a 2.5 million kill last week, um, this week, and potentially next week, uh, talking like a 247, 248.
• 4:35
  SPEAKER_02: So that's a pretty big week as you start to stare at the first of May.
• 4:41
  SPEAKER_02: Um, that's going to be you know hitting on all cylinders on a five-day week, basically, um, maybe a little bit uh going through the system on Saturday, too, as far as uh hog numbers go.
• 4:53
  SPEAKER_02: Um, so that that is a little scary.
• 4:56
  SPEAKER_02: We they are carrying some extra weight yet.
• 4:58
  SPEAKER_02: We've trimmed that back a little bit week over week, but in my mind, not as much as what I'd like to see for the size of the harvest that we're seeing on a weekly basis here.
• 5:08
  SPEAKER_02: So, you know, I think the front-end fundamentals, um, especially on you know, as it concerns to the June futures, we had to give that some respect today.
• 5:18
  SPEAKER_02: That's why you had to be down you know, a third of what you put on yesterday.
• 5:22
  SPEAKER_02: You still do have a gap on the chart if you want to talk about technicals again.
• 5:27
  SPEAKER_02: Um I I gotta kind of believe that's one of those gaps that are gonna want to be filled in the coming days, so don't be surprised if that happens.
• 5:35
  SPEAKER_02: Um, but then let's talk about those more deferred months.
• 5:39
  SPEAKER_02: Um, the fact that we were able to put a dollar on October, put a dollar on December, are pretty close to a dollar higher on next February, guys.
• 5:51
  SPEAKER_02: That's a big deal.
• 5:53
  SPEAKER_02: In my mind, that's another signal of some money wanting to come in this marketplace.
• 5:58
  SPEAKER_02: So you had big gap open yesterday, you had the backbones.
• 6:02
  SPEAKER_02: Anytime you put a dollar on an extreme deferred market, like we did on the February today, you have to say there's some pretty big money that's coming into the marketplace.
• 6:12
  SPEAKER_02: Um, and that's that's really good news.
• 6:15
  SPEAKER_02: Um, you're gonna need to follow it up with some fundamentals, of course, but that's really encouraging for a hedger to see if we can attract the big money back into this marketplace.
• 6:25
  SPEAKER_02: It looks like they're willing to push further back into the futures curve, um, giving us those opportunities that we're really looking for.
• 6:32
  SPEAKER_01: Yeah, we piled on quite a few red days there, all the way from the 8th of April, really lowered, especially amongst the third months.
• 6:38
  SPEAKER_01: We haven't seen the green day for quite some time, really, until the past two days here, so that's been nice to see.
• 6:45
  SPEAKER_02: And kind of destroyed any technical indicator on the way down.
• 6:49
  SPEAKER_02: Yep.
• 6:50
  SPEAKER_02: Especially on the front month of June, right?
• 6:52
  SPEAKER_01: Didn't seem to blink on the way down, and then for us to gap over top of that 200 day was uh a very impressive move.
• 6:59
  SPEAKER_01: So a little bit overdone technically.
• 7:01
  SPEAKER_01: Got some buying going on in those back months.
• 7:04
  SPEAKER_01: We'll see what happens with front-end fundamentals if we can stop killing so many hogs and uh get into a few less of those.
• 7:09
  SPEAKER_01: And hopefully, cutout here will do its normal seasonal thing, right?
• 7:12
  SPEAKER_01: And start to take off sometime in May to help out that June contract a little bit more than what just a normal relationship would be at some point there to get excited about that and the front-end fundamentals.
• 7:22
  SPEAKER_01: What else do you got for the for the hog market here with uh with some of the trade recently?
• 7:27
  SPEAKER_02: Yeah, I think if you focus on the cutout here for a moment, yeah, I I think we'll we'll see some higher markets as we get into May.
• 7:33
  SPEAKER_02: We should see some lower supply.
• 7:35
  SPEAKER_02: That all should work well for the picture of this hog market, Mike.
• 7:40
  SPEAKER_02: You know, the remaining question, of course, is are we gonna end up with an index that goes up uh you know up over 102, 103 in June?
• 7:48
  SPEAKER_02: It's still gonna be a little bit of a push to get there that quickly.
• 7:52
  SPEAKER_02: Time just kind of gets uh on the wrong side here.
• 7:55
  SPEAKER_02: But you know, this time of year, if things start going the right direction, they can go pretty fast too, um, as far as front-end fundamentals go here.
• 8:03
  SPEAKER_02: So we're not losing a lot of sleep over that.
• 8:05
  SPEAKER_02: Um, it you know, as we break down the primals, there's a few things that we're watching this week um inside of the cutout mic.
• 8:12
  SPEAKER_02: Um, the one is the ham market.
• 8:14
  SPEAKER_02: We're able to push that ham market up over 90 cents.
• 8:17
  SPEAKER_02: Um, you know, we kind of thought it would bounce off the 70 cent area.
• 8:22
  SPEAKER_02: Uh pushing up into this type of level is really exceeding our expectations.
• 8:26
  SPEAKER_02: So that's a really excellent sign.
• 8:28
  SPEAKER_02: That's that's part of the reason why we're able to push the product up into this hundred dollar range again.
• 8:34
  SPEAKER_02: Um, and you know, all must be well as far as shipments to Mexico, for an example, um, because we are putting some extra pounds on out the door, right?
• 8:43
  SPEAKER_02: So that's what makes all this kind of impressive.
• 8:45
  SPEAKER_02: Um, some of the weakness that's come in the past week has come from the belly primal.
• 8:50
  SPEAKER_02: So I you know that is just not another thing that we're just we're not gonna spend a lot of time worrying about.
• 8:57
  SPEAKER_02: You know, we shouldn't have to be worried about the belly market as we start approaching the first of May.
• 9:02
  SPEAKER_02: So there's a little bit of erratic uh trade going on there, a little bit of volatility.
• 9:07
  SPEAKER_02: Um, but you know, you shorten this thing up and get into the right seasonal bellies, should not be what this hog market has to worry about.
• 9:15
  SPEAKER_02: So I would pay attention to that going forward too.
• 9:18
  SPEAKER_02: If we're lower from day to day and it's on the product values in the afternoon report, and it's because of the bellies, I wouldn't I wouldn't be I'd be discounting that.
• 9:28
  SPEAKER_02: I think the trade will probably discount that as well.
• 9:30
  SPEAKER_01: That one really whips around the cutout, doesn't it?
• 9:32
  SPEAKER_01: When that belly market loads, that can that can move the cutout quite a bit.
• 9:36
  SPEAKER_02: Yeah, and you just have some folks that need to clean up a little bit of supply here and there.
• 9:40
  SPEAKER_02: Um we've seen that in the hand mark a couple weeks ago too.
• 9:43
  SPEAKER_02: But more common in the belly market could just be off a few loads of belly.
• 9:48
  SPEAKER_01: Yeah.
• 9:49
  SPEAKER_01: And something that that piqued my interest recently was you talked about getting into a few less hogs here, hopefully soon, and that helping out the meat prices.
• 9:57
  SPEAKER_01: On the beef side, you've actually seen that.
• 9:59
  SPEAKER_01: Packers have backed down on the cattle side on numbers recently and trying to improve their margins a little bit, and it seems to be working, right?
• 10:08
  SPEAKER_01: Choice cutouts heading higher, normal seasonal trend, too, to go along with it.
• 10:12
  SPEAKER_01: So hopefully that would be a similar deal.
• 10:14
  SPEAKER_01: You get in into a little bit lower numbers on the pork side, and hopefully that can help out the meat price on the pork too.
• 10:20
  SPEAKER_02: It'll be the next test to the whole protein.
• 10:23
  SPEAKER_02: Is protein still um kind of the golden egg from a demand standpoint, right?
• 10:28
  SPEAKER_02: Can we push this beef market higher into May, uh, like we do pretty much every year?
• 10:35
  SPEAKER_02: I think with the supplies uh that we're seeing today and the harvest levels being as low as they are over on the beef side, I think you will see that, but it will be another test to see what this demand picture looks like and um the pork side the same way, maybe not quite as uh on the edge of the spear, so to speak, but it'll be interesting to see what happens as we get into May and into the first part of June.
• 11:02
  SPEAKER_01: Very much so.
• 11:02
  SPEAKER_01: Any final thoughts for our listeners this week on the hog market?
• 11:05
  SPEAKER_02: I don't think so.
• 11:06
  SPEAKER_02: I I guess the advice I would have is you know, I know folks are getting busy this time of year, but let's not uh kind of fall asleep at the wheel, if you will.
• 11:15
  SPEAKER_02: Uh, if we're gonna get some money flowing back into this marketplace, you might start seeing that June start push up towards uh 85 bucks again.
• 11:23
  SPEAKER_02: Or excuse me, that's December.
• 11:25
  SPEAKER_02: Um it's currently 83.50 push up to 85.
• 11:28
  SPEAKER_02: Next June is creeping over a buck.
• 11:32
  SPEAKER_02: Um, so you might see that push a dollar higher two all of a sudden if you get some money coming into the complex on some lower volume.
• 11:40
  SPEAKER_02: So it's it might pay uh to to pay attention here.
• 11:44
  SPEAKER_01: Alright, sounds good.
• 11:45
  SPEAKER_01: Well, thank you for your time today, Jeff.
• 11:46
  SPEAKER_01: Thank you everyone else for tuning in.
• 11:48
  SPEAKER_01: We appreciate it.