Latest / Professional Ag Marketing Podcast / Iran, Crude, and Cash Hogs | Hog Market Talk April 29th, 2026

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Iran, Crude, and Cash Hogs | Hog Market Talk April 29th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_01: Welcome to the Hog Market Talk Podcast.
• 0:06
  SPEAKER_01: Your weekly deep dive into Hog Market Fundamentals, breaking news, and industry insights.
• 0:12
  SPEAKER_01: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_00: All right, I've got Luke Wells with us here today.
• 0:24
  SPEAKER_00: How's it going, Luke?
• 0:25
  SPEAKER_00: Good uh good afternoon, Mike.
• 0:26
  SPEAKER_00: It's going well, man.
• 0:28
  SPEAKER_00: Good deal.
• 0:28
  SPEAKER_00: Where we're gonna talk about a few things today.
• 0:30
  SPEAKER_00: I'm gonna start off.
• 0:31
  SPEAKER_00: We're just gonna go through some of the Iran conflict, talk about oil and corn and wheat, and some of the moves there in the input side of things, and then you're gonna wrap up kind of talking about the hog market, talk about cash a little bit, manage money, some things along those lines.
• 0:46
  SPEAKER_00: Sounds awesome.
• 0:47
  SPEAKER_00: All right.
• 0:47
  SPEAKER_00: So let's start off with the Iran conflict.
• 0:49
  SPEAKER_00: We've had a few news headlines kind of come up lately.
• 0:53
  SPEAKER_00: Uh oil prices really surged today.
• 0:55
  SPEAKER_00: We'll have uh that slide up that you can see from uh from Cade there.
• 0:59
  SPEAKER_00: But prices surged here after media reported that Trump rejected the Iranian proposal about the Strait of Hormuz, Brent WTI up about 7% here today.
• 1:09
  SPEAKER_00: Yeah, a few things have been going on.
• 1:11
  SPEAKER_00: It seems like that market's accelerated a little bit again.
• 1:14
  SPEAKER_00: Ceasefire that was in or is in place seems unlikely to continue.
• 1:19
  SPEAKER_00: It seems like war is likely to be back on.
• 1:21
  SPEAKER_00: And I think the funds have been piling money into the crude oil market specifically here, kind of backing that up.
• 1:27
  SPEAKER_00: So oil prices have leaped here.
• 1:29
  SPEAKER_00: Uh really interesting trade lately, I think, because uh the SP 500 also had an amazing recovery, 20th fastest recovery ever for SP in the four-week time frame we had.
• 1:42
  SPEAKER_00: If you look back, we were down about 5% in the month of March, up about 9% in the month of April.
• 1:48
  SPEAKER_00: So really big turnaround.
• 1:49
  SPEAKER_00: I think it caught a lot of traders off guard in the SP turnaround here.
• 1:53
  SPEAKER_00: For us, this war is not over with yet, and the SP was back up to record levels.
• 1:57
  SPEAKER_00: So I think that caught a lot of folks off guard, especially with crude oil now advancing higher again.
• 2:02
  SPEAKER_00: Now, the one thing to watch out for would be the US dollar.
• 2:06
  SPEAKER_00: If the war does come back on full swing, the US dollar likely accelerates.
• 2:11
  SPEAKER_00: Uh, so keep an eye on that, especially in the commodity world, makes exports a little bit less competitive, Luke.
• 2:17
  SPEAKER_00: But it it would be a little bit bullish on crude oil still from these levels, and and along with that, too, you're looking at the grain markets, corn and soybeans and wheat specifically that would be beneficial from that.
• 2:28
  SPEAKER_00: So uh the soybean oil was up pretty good again today.
• 2:32
  SPEAKER_00: Soybeans popped with it along uh right up November, almost within a penny of contract highs again on that market.
• 2:39
  SPEAKER_00: I'll have Cade pull up the uh December corn chart there.
• 2:42
  SPEAKER_00: Uh made new highs on the move, 499, but we didn't quite clip five bucks yet.
• 2:48
  SPEAKER_00: So still haven't traded five bucks since the end of 23 on December corn here.
• 2:52
  SPEAKER_00: Something to keep an eye on is we're bumping right up against that right now, Luke.
• 2:56
  SPEAKER_00: It's it's really been something to watch.
• 2:58
  SPEAKER_00: So uh in turn, after this announcement, uh Iran.
• 3:03
  SPEAKER_00: They're keeping the straight of four moves closed and the other oil tankers open to carry crude to customers worldwide.
• 3:08
  SPEAKER_00: So the blockade continues in the time being.
• 3:11
  SPEAKER_00: Uh uh, this is likely probably not over with quite yet.
• 3:16
  SPEAKER_00: Uh the U.S.
• 3:16
  SPEAKER_00: stock market, they did lose just a little bit of ground today, but not too much.
• 3:20
  SPEAKER_00: We had the afternoon announcement from the Federal Reserve here today as well, Lucas.
• 3:25
  SPEAKER_00: Uh, what we saw there was no change, which was basically dang near 100% guaranteed that we weren't gonna see a change out of the Federal Reserve.
• 3:32
  SPEAKER_00: This was Powell's last remarks as Fed chairman, so we're now to the new guy uh next month.
• 3:38
  SPEAKER_00: He is gonna stay on as Fed Governor.
• 3:40
  SPEAKER_00: It seemed like that was the biggest headlines I've seen in the last half hour when I was watching him talk.
• 3:44
  SPEAKER_00: So him staying on board basically until the investigation into the into uh into the the Fed is over with from the DOJ.
• 3:52
  SPEAKER_00: So that that's pretty much all the news I got for you when it comes to Federal Reserve and what they've done here today with the announcement.
• 3:59
  SPEAKER_00: A lot of earnings as well this afternoon for the Meg 7, 4 of the 7 uh coming out as well.
• 4:05
  SPEAKER_00: So a big week for the tech stocks.
• 4:07
  SPEAKER_00: Uh outside money flow is a booming.
• 4:10
  SPEAKER_00: Crude oil has been moving hard up six, seven bucks most of the day today.
• 4:14
  SPEAKER_00: And then the the input sides, corn, wheat, really been running hard lately, Luke.
• 4:19
  SPEAKER_00: So a lot of activity in those outside markets surrounding the hogs right now.
• 4:22
  SPEAKER_02: Yeah, 100%, 100%.
• 4:24
  SPEAKER_02: And this it just it appears that this this thing is gonna have a longer tail, right?
• 4:28
  SPEAKER_02: So protecting your inputs as a as a as a protein producer is you know, has been and continues to be uh you know important, I think, as we as we sort through this, what appears to be a longer term a longer term issue, right?
• 4:43
  SPEAKER_02: And I I mean uh above that too, I mean, uh few fuel prices popped, you know, and have been raising really propped day over day, right?
• 4:50
  SPEAKER_02: At the pump, I mean, right?
• 4:51
  SPEAKER_02: And University of Michigan came out with their consumer confidence study, right?
• 4:55
  SPEAKER_02: Lowest consumer confidence rating ever, as long as they've been doing that.
• 4:58
  SPEAKER_00: It wasn't good.
• 5:00
  SPEAKER_02: Yeah, I mean, so just all that kind of matters, and and um, you know, and anything energy related, I mean, yeah, you mentioned crude and oil, but and you mentioned biofuels, soy, you know, soy oil, like that.
• 5:11
  SPEAKER_02: That looks like it's those things have a yeah, they have a trajectory.
• 5:15
  SPEAKER_00: The impact on agriculture.
• 5:16
  SPEAKER_00: I mean, sure, gas is up a dollar uh a gallon from last year's levels, but but diesel man, almost two bucks higher from last year.
• 5:25
  SPEAKER_00: That when I'm talking about trucking grain somewhere, or you know, you're taking a load of hogs that cuts into stuff.
• 5:32
  SPEAKER_02: Yeah, absolutely.
• 5:32
  SPEAKER_00: So yeah, keep an eye on that.
• 5:34
  SPEAKER_00: Inflation, anyways, that makes up about half of the inflation complex would be just fuel prices alone.
• 5:40
  SPEAKER_02: Yes, yes, yes.
• 5:41
  SPEAKER_02: So we talk about some pigs?
• 5:42
  SPEAKER_00: Let's talk about some pigs.
• 5:43
  SPEAKER_00: What can you tell me?
• 5:44
  SPEAKER_00: We finally got up to some resistance levels again today.
• 5:47
  SPEAKER_00: Having a little trouble breaking through some of these levels, aren't we, Luke?
• 5:50
  SPEAKER_02: Yeah, I mean, uh it it's the hog market.
• 5:53
  SPEAKER_02: I I it's kind of continued to be rinse and repeat, right?
• 5:57
  SPEAKER_02: I mean, the hog market's carried some nice forward premiums.
• 5:59
  SPEAKER_02: It wants to move higher, right?
• 6:01
  SPEAKER_02: But we're just we're we're we're we're in that time of year where we're still, you know, close, you know, closer to 25, 245, 25 kill than a two four kill, right?
• 6:10
  SPEAKER_02: Weekly harvest, I'm sorry.
• 6:12
  SPEAKER_02: Um, so uh, you know, quite frankly, that's we've seen some volatility and some some downward movement.
• 6:17
  SPEAKER_02: And it's just because we're still kind of in a flatter structure and nothing's broken, nothing's wrong.
• 6:22
  SPEAKER_02: I mean, the hog complex is you know, is still isn't a good spot.
• 6:25
  SPEAKER_02: But I I'd like to start with the managed money chart.
• 6:27
  SPEAKER_02: I think that's just a good way to kind of talk through this.
• 6:30
  SPEAKER_02: So, you know, if if Kate can bring that up, we you know, this would be a through last Thursday's commitment of traders, you know, shelled another 23,000 contracts in the lean hogs.
• 6:39
  SPEAKER_02: It puts us down to about about 65,000, 66,000 long versus record of 146 versus record short of minus 30.
• 6:48
  SPEAKER_02: Go ahead, Mike.
• 6:49
  SPEAKER_00: Decreased though.
• 6:50
  SPEAKER_00: I mean, if you don't pay attention to that every other week yet, that's come down a little bit.
• 6:54
  SPEAKER_02: It's it's came down a lot as we've taken uh money out of the front end of the lean hog curve for various reasons.
• 7:00
  SPEAKER_02: But this this honestly, this so you can look at this a couple different ways.
• 7:03
  SPEAKER_02: Like we we need to drop, and it's probably mid-May to later May to some lower seasonally adjusted production runs, more two fours than than two four sevens, right?
• 7:12
  SPEAKER_02: Um, we need cutout to go.
• 7:14
  SPEAKER_02: I mean, like the landscape's all laid, beef prices high, pork's competitive, pork's getting lots of features, you know, all that's there, right?
• 7:22
  SPEAKER_02: So, but if we go another two weeks down the road and cutout's still stuck at 98, there'll be more to shed, right?
• 7:28
  SPEAKER_02: Now, the other side of that equation is you know, you know, there's a lot of there's a lot of uh dry powder to buy if if if if we get this run.
• 7:36
  SPEAKER_02: And like we gotta remember we're we're still in a spring hog market, we're not in a summer hog market yet.
• 7:41
  SPEAKER_02: And it's it's kind of like like sucking water through a garden hose.
• 7:44
  SPEAKER_02: You kind of you gotta siphon it, get it going, it's slow, and and and once you turn that corner and we get down to two, four or so or lower type, you know, then water flows, right?
• 7:52
  SPEAKER_02: And so I guess my point with this is this is not an uncommon managed money position.
• 7:57
  SPEAKER_02: You look at Q1 of every year, the index is moving up off our winter lows.
• 8:02
  SPEAKER_02: Uh, futures a lot of times will make contract highs, everybody gets excited, right?
• 8:06
  SPEAKER_02: But then you hit this March-April time frame when the market's just flat, right?
• 8:10
  SPEAKER_02: Okay, just flat, cutouts flat, and then you know, the managed money, they get a little tired of that, right?
• 8:15
  SPEAKER_02: And and and they trim some positions just like they've done here.
• 8:18
  SPEAKER_02: And you go back a year ago, you can see we caught our summer rally and they bought back in, right?
• 8:22
  SPEAKER_02: Yeah.
• 8:23
  SPEAKER_02: I mean, so so this is noteworthy, right?
• 8:25
  SPEAKER_02: And it it it needs to be watched, but it's it's it's it's kind of the I think we've been seeing the hog market this spring has really been kind of following the textbook, right?
• 8:33
  SPEAKER_02: Um so uh where's the light at the end of the tunnel?
• 8:36
  SPEAKER_00: We you you mentioned the amount of hogs that we still have available today.
• 8:40
  SPEAKER_00: When is that gonna start getting slim enough that the Packers can start to pad their margins a little bit more?
• 8:45
  SPEAKER_02: Well, I don't I don't I I don't know if it's I mean this isn't the time of year when Packers are gonna pad their margins because they're coming to tighter space.
• 8:51
  SPEAKER_00: Well they're trying to they're trying to I mean are they pulling ahead here or not?
• 8:55
  SPEAKER_02: No, I think we're I think we're about balanced.
• 8:57
  SPEAKER_02: I mean I think it's the time of year when producer margins should go up, right?
• 9:00
  SPEAKER_02: Yeah, lowest right margin.
• 9:01
  SPEAKER_02: But we're I I I you know from from that perspective, I mean, we're about we we've we've had plenty of production around.
• 9:07
  SPEAKER_02: I'm not saying it's problematic.
• 9:09
  SPEAKER_02: Been putting and and pigs are big.
• 9:10
  SPEAKER_02: Corn, even though corn's reality, it's still relatively low cost, like lots of pork on the market, right?
• 9:15
  SPEAKER_02: And so we've just been we've just been in this this flat realm.
• 9:18
  SPEAKER_02: Um cash this week, and you know, future futures were up today, and it could have been some cattle hog spreads unwind.
• 9:24
  SPEAKER_02: Also, cash like 96 traded today.
• 9:27
  SPEAKER_02: That's a buck higher than 95 that did a week ago and traded yesterday.
• 9:31
  SPEAKER_02: You know, index is 91.
• 9:32
  SPEAKER_02: I mean, so it's that's all good stuff, right?
• 9:35
  SPEAKER_02: Um, so that could have helped because the hog market keeps wanting to go higher, but we get through the week and then cutout ends the week stuck at 98.
• 9:42
  SPEAKER_02: Yeah, and then we sell back down to 101 on the June or 10150 or whatever, right?
• 9:46
  SPEAKER_02: And so right now, actually, today where the board closed with today's rally basis is a little worse than normal.
• 9:52
  SPEAKER_02: It's been about right on the five-year trend.
• 9:54
  SPEAKER_02: Um, so futures got a little optimistic to June.
• 9:57
  SPEAKER_02: Yeah, versus the June, just on a five-year, meaning the premium from index today to June futures has been pretty normal.
• 10:04
  SPEAKER_02: It's not been elevated, it's not been discounted, it's been pretty normal, right?
• 10:08
  SPEAKER_02: So the market's playing it kind of straight up.
• 10:10
  SPEAKER_02: Then you go to the July and the August, it's a few bucks higher, right?
• 10:12
  SPEAKER_02: It's just we want to continue to have this optimism.
• 10:15
  SPEAKER_02: And and again, we are too.
• 10:16
  SPEAKER_02: We are too.
• 10:17
  SPEAKER_02: We're optimistic on it.
• 10:18
  SPEAKER_02: Um, uh uh, I've had kind of a trend change and we've had good weight.
• 10:22
  SPEAKER_02: I mean, I'd say like the last five weeks, customers like, yeah, plenty of good growth of my pigs are growing well, good weight, right?
• 10:27
  SPEAKER_02: You know, like in the last five days, last seven days, like, yeah, I'm getting into my next round of barns and they're a little lighter.
• 10:33
  SPEAKER_02: Just the weight's not there.
• 10:34
  SPEAKER_02: They need a few more days.
• 10:35
  SPEAKER_02: That's very normal as you come into this as it gets warmer as some of the more health challenges come through, right?
• 10:40
  SPEAKER_02: So, you know, just the hog market, honestly, just we're we're still optimistic.
• 10:44
  SPEAKER_02: We we, you know, we have the best demand structure we've ever had as an industry in front of us.
• 10:49
  SPEAKER_02: We just quite frankly, we just need to drop down to two, four.
• 10:52
  SPEAKER_02: We need to we need summer kills, not spring kills, right?
• 10:54
  SPEAKER_02: And we think they're coming.
• 10:56
  SPEAKER_02: Um, but just just just be a little bit patient there.
• 10:59
  SPEAKER_02: Um, and uh again, still still very optimistic.
• 11:02
  SPEAKER_02: Not so optimistic to June.
• 11:04
  SPEAKER_02: I think June's got plenty of premium in it for today, right?
• 11:07
  SPEAKER_02: But I'm talking more July on out.
• 11:09
  SPEAKER_02: I think the market's got a lot of good things in it.
• 11:11
  SPEAKER_02: And and just the other thing for for for perspective, right?
• 11:13
  SPEAKER_02: It's all relative, but um, you know, we still have really good Ford margins ahead of us.
• 11:18
  SPEAKER_02: And you know, quite frankly, when you look into April of next year and June of next summer, I mean, they're not quite at today's price, they're not far off it, right?
• 11:24
  SPEAKER_02: I mean, the hog industry is in a good spot, demand's good, supply is manageable.
• 11:28
  SPEAKER_02: You know, we just uh, you know, to oversimplify and wrap this thing up, we just I think we get into a few less picks, which are coming.
• 11:34
  SPEAKER_02: Uh, I think the cutout will respond and that uh that'll drive this thing again.
• 11:38
  SPEAKER_02: All right.
• 11:39
  SPEAKER_02: Well, thanks for your time, Luke.
• 11:40
  SPEAKER_02: Take care, man.
• 11:42
  SPEAKER_00: Thank you for tuning in today.
• 11:43
  SPEAKER_00: Please click on the link in the description to find our daily market commentary, along with many other marketing items that you may find interesting.
• 11:50
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