Latest / Professional Ag Marketing Podcast / Cutting Summer Kills | Hog Market Talk May 13th, 2026

Transcript

Cutting Summer Kills | Hog Market Talk May 13th, 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 insights.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_02: All right.
• 0:22
  SPEAKER_02: Today is May 13th.
• 0:24
  SPEAKER_02: I've got Luke with us here today.
• 0:25
  SPEAKER_02: How's it going, Luke?
• 0:26
  SPEAKER_01: Yeah, it's going really good.
• 0:27
  SPEAKER_01: Mike, how are you doing today?
• 0:28
  SPEAKER_02: Awesome.
• 0:28
  SPEAKER_02: It's uh, you know, I deal a lot in the grain space and outside markets.
• 0:34
  SPEAKER_02: So this is a very active fun week for the grain station and in our group.
• 0:39
  SPEAKER_01: Yeah, a lot, a lot going on for sure.
• 0:41
  SPEAKER_01: And also, I'll tell you, you know, yesterday uh it was really windy, right?
• 0:45
  SPEAKER_01: Strong northwest wind.
• 0:47
  SPEAKER_01: But you know what was nice about that northwest wind?
• 0:49
  SPEAKER_01: It was a warm northwest wind.
• 0:51
  SPEAKER_01: It was warm.
• 0:52
  SPEAKER_01: You know, so let's say we got some warming coming, and you know, we're gonna this is the hog podcast.
• 0:56
  SPEAKER_01: We're talking about meat demand and grilling season and just need a little more activity.
• 1:00
  SPEAKER_01: And, you know, a theme.
• 1:01
  SPEAKER_01: I mean, we're the spring is wrapping up.
• 1:03
  SPEAKER_01: We're getting here to this summer, and that's it's a good thing, man.
• 1:05
  SPEAKER_01: Makes us happy.
• 1:06
  SPEAKER_02: That it is.
• 1:07
  SPEAKER_02: So we're gonna talk about a few things today.
• 1:08
  SPEAKER_02: We're gonna talk about how many of these animals are sitting around here today.
• 1:12
  SPEAKER_02: We're gonna talk about demand a little bit.
• 1:14
  SPEAKER_02: We're gonna just talk about seasonals and and how the futures are reacting, some of those sides.
• 1:19
  SPEAKER_02: But first, I want to start with the grain markets here.
• 1:22
  SPEAKER_02: I want to just walk through this week and all of the the huge events happening from a seasonal perspective right now.
• 1:29
  SPEAKER_01: It's big week for grainhouse.
• 1:31
  SPEAKER_02: So in the grain complex here, just if I wanted to look at the uh just the timeline that Cade's got up here, and this is happening this timeline at a time of the year when we've got near record fund longs and and corn, soybeans, uh, wheat, like uh we've got a lot of long positions in these grains at a time of the year that we normally put in things like weather premium, and the in the market really gets traded and volatile.
• 1:57
  SPEAKER_02: Uh, we just finished up planning, it's a little dry through the southwest corn belt.
• 2:01
  SPEAKER_02: Like things are happening in the grain space.
• 2:04
  SPEAKER_02: Um so this week in particular was has been and is massive.
• 2:08
  SPEAKER_02: We're straight in the middle of this thing.
• 2:10
  SPEAKER_02: You had planning progress Monday, which is big, because that report historically you look after May 10th, if corn's not planted, you start to take yield off.
• 2:19
  SPEAKER_02: Now, planning progress was great last week, so we fully got caught up.
• 2:22
  SPEAKER_02: Tuesday, you had the WASDA report for the grains, which is big, and then you had the CPI report that morning, which was also big.
• 2:30
  SPEAKER_02: Now on the WASDA side, what we saw was wheat came out at the lowest U.S.
• 2:35
  SPEAKER_02: wheat production we've had since 1972, winter wheat since like 57.
• 2:40
  SPEAKER_02: Uh a big miss for production estimates out of the United States on wheat, which it it should have been expected.
• 2:47
  SPEAKER_02: Like we know there's a wheat problem.
• 2:48
  SPEAKER_02: Right.
• 2:49
  SPEAKER_02: Most wheat in a drought production-wise, since 22.
• 2:52
  SPEAKER_02: Uh, you know, we've got all these problems in the Southwest Corn Belt.
• 2:55
  SPEAKER_02: People are spraying wheat, killing it, planting corn or Milo instead, et cetera.
• 2:59
  SPEAKER_02: So it makes sense that you had a miss on it.
• 3:01
  SPEAKER_02: But we traded limit yesterday across a lot of these wheat complexes, up 45 cents.
• 3:07
  SPEAKER_02: So it piled in.
• 3:08
  SPEAKER_02: You saw corn and soybeans kind of rally off that as well.
• 3:11
  SPEAKER_02: Oil rallied uh lately as well because the ceasefire looks even more fragile than what fragile was before.
• 3:18
  SPEAKER_02: And then uh, you know, if I if I look at the rest of the week here, our trade is gonna shift from trading a little bit more of oil, which we've been we've had an 81% correlation between corn and crude oil lately, the strongest in the egg markets.
• 3:32
  SPEAKER_02: Now you're gonna shift towards Trump landed in Beijing this morning here.
• 3:37
  SPEAKER_02: They're gonna talk tonight about 8-R time, and that's gonna dominate the headlines here till the rest of the week.
• 3:42
  SPEAKER_02: So the rumor on the street is if it's good news, you're gonna hear by close Friday.
• 3:46
  SPEAKER_02: The if it's bad news, you're probably gonna wait till the weekend to find most details about what happens.
• 3:51
  SPEAKER_02: Now, I want to kind of transition from the grains and these outside markets and the reports using yesterday and today's data coming out from the CPI and PPI, which both came out hotter than anticipated.
• 4:05
  SPEAKER_02: And a big part of that was one energy.
• 4:07
  SPEAKER_02: Obviously, we're spending a buck thirty more on gas than we did last year at this time for the national average.
• 4:13
  SPEAKER_02: It's and it's very real.
• 4:14
  SPEAKER_02: Feel it at the pump, right?
• 4:16
  SPEAKER_02: Feel it at the pump.
• 4:17
  SPEAKER_02: But the thing they mentioned right after that, like when I was watching Bloomberg yesterday when they were talking about the CPI report, inflation, they talked about it's energy and it's beef.
• 4:27
  SPEAKER_02: And the fact that they said beef second in that, I feel like when I looked at the market and then you saw the rest of the day, we basically traded red and red and red.
• 4:37
  SPEAKER_02: And it started off the day pretty nice because that deal the deal that Trump said he was gonna cut or delay, he was gonna get rid of the additional tariff quota on beef.
• 4:48
  SPEAKER_02: Um, he was gonna delay that or whatever, uh, because it was supposed to take effect Monday.
• 4:52
  SPEAKER_02: That kind of helped for a little bit, but they're like, Yeah, we're still gonna do it.
• 4:55
  SPEAKER_02: It's just we're finalizing it.
• 4:57
  SPEAKER_02: Sure.
• 4:57
  SPEAKER_02: That then it really wrecked the market.
• 4:59
  SPEAKER_02: Then so this this administration has a problem with inflation.
• 5:03
  SPEAKER_02: Trump can't cut interest rates until he has inflation under control, and that's oil and that's beef.
• 5:08
  SPEAKER_02: So right now he's saying we're gonna import some beef.
• 5:12
  SPEAKER_02: Don't want to import too much because we still need packing plants here.
• 5:15
  SPEAKER_02: We need food security, like we don't want to run uh rile this thing up too bad to where we lose food security, but we need these beef prices to go lower.
• 5:24
  SPEAKER_02: That's just not conducive to you have a ton of managed money longs in this meat market still.
• 5:29
  SPEAKER_02: They've been getting out of a little bit here and there, especially in even the hog side.
• 5:34
  SPEAKER_02: Right.
• 5:34
  SPEAKER_01: I felt in the hogs for sure.
• 5:35
  SPEAKER_02: Yeah, it's it's been pulling back each week, not like all at once, but you can see just even when you line up a futures chart, you can just see it slowly exiting the building.
• 5:45
  SPEAKER_02: But that brings me into the hog market here.
• 5:48
  SPEAKER_02: We're at a seasonal time frame where normally at some point you wake up one morning and it just goes.
• 5:55
  SPEAKER_02: And we're not there yet, are we?
• 5:56
  SPEAKER_01: We're not quite there yet, but then again, that's it's it's not that normal.
• 5:59
  SPEAKER_01: I I mean, let's talk about health again, right?
• 6:02
  SPEAKER_01: And and we you can you can let health dominate the discussion, right?
• 6:05
  SPEAKER_01: And whenever I talk about health, like it's we're looking at year-over-year comparisons.
• 6:09
  SPEAKER_01: Health was also bad a year ago, right?
• 6:11
  SPEAKER_01: Um, but it's it's been bad this year, actually, just in the last 10 days, especially up here in our country, western Minnesota, eastern South Dakota, it is really hot.
• 6:19
  SPEAKER_01: There's been some breaks and whatnot.
• 6:21
  SPEAKER_01: The weaned pig market is insatiable.
• 6:23
  SPEAKER_01: Wean pig market should be falling because we're going off the decent contract.
• 6:26
  SPEAKER_01: It's not.
• 6:27
  SPEAKER_01: Um, and so there's lots of lots of things going on here, right?
• 6:32
  SPEAKER_01: Um, and so that like kind of all blends into the market.
• 6:35
  SPEAKER_01: I think though that you know, we got a lot of optimism early.
• 6:38
  SPEAKER_01: And they thought maybe maybe the the health hole would start a little earlier, like earlier into May, and it just hasn't.
• 6:44
  SPEAKER_01: We've had plenty of pigs seasonally, I mean seasonally adjusted, and it's kept the front end of this curve just just flat, specifically on the meat side, right?
• 6:52
  SPEAKER_01: And so we've been around this 245.
• 6:54
  SPEAKER_01: And I talked about spring here coming to summer.
• 6:56
  SPEAKER_01: 245, that's a spring kill.
• 6:58
  SPEAKER_01: It's a spring price, right?
• 7:00
  SPEAKER_01: Uh two four and under, which is coming.
• 7:03
  SPEAKER_01: That's a summer.
• 7:04
  SPEAKER_02: We had last year, right?
• 7:05
  SPEAKER_02: Was like 239 this week last year or something.
• 7:07
  SPEAKER_02: Uh not quite.
• 7:07
  SPEAKER_01: It's that's the thing, is it it's usually the end of May?
• 7:10
  SPEAKER_01: It's usually right around Memorial Day, right?
• 7:12
  SPEAKER_01: So it's coming in, you know, this week 245, next week 241.
• 7:15
  SPEAKER_01: Those are still hefty production runs, right?
• 7:17
  SPEAKER_01: Yep.
• 7:18
  SPEAKER_01: And so, but the market sees this.
• 7:20
  SPEAKER_01: Um, you know, but basis uh should be like four or five bucks negative here.
• 7:24
  SPEAKER_01: I think Cade's got a chart, he'll maybe flip up on that.
• 7:26
  SPEAKER_01: You know, we're trading like a nine, ten dollar basis.
• 7:29
  SPEAKER_01: The the the read from that is there's a lot of premium relative to today's spot fundamentals in the market.
• 7:35
  SPEAKER_01: The market wants to move higher, it just we got to get to these lower kills, which which are coming, uh, and and and but you know, it's still got to stay checked into lower reality.
• 7:45
  SPEAKER_01: So, what are leading indicators?
• 7:47
  SPEAKER_01: Um, cutout drives this market.
• 7:49
  SPEAKER_01: We all know that, right?
• 7:50
  SPEAKER_01: But cash is a leading indicator.
• 7:51
  SPEAKER_01: Usually in the spring, the cash is gonna come a little quicker in the cutout.
• 7:54
  SPEAKER_01: The index is around 90, Mike.
• 7:56
  SPEAKER_01: Um, it's not a high, I mean, it's it's around 90, not a bad price.
• 8:00
  SPEAKER_01: 90 works really well for our businesses, right?
• 8:02
  SPEAKER_01: But cash hogs again this week 95, 96, 96.50 got paid.
• 8:07
  SPEAKER_01: I mean, supply's tight, right?
• 8:09
  SPEAKER_01: And packers are are needing that supply.
• 8:11
  SPEAKER_01: Um, but again, every time we rally this thing up, that basis just widens out.
• 8:15
  SPEAKER_01: June's got to kind of check in.
• 8:17
  SPEAKER_01: So you've got that's why you've got this volatility up front.
• 8:19
  SPEAKER_01: You've had this little lower trade, right?
• 8:21
  SPEAKER_01: But today we're at we're having a really good board day today.
• 8:24
  SPEAKER_01: Um, we got June up 230 as we talk, July up a buck 57.
• 8:29
  SPEAKER_01: And I think what's coming into the trade and getting talked about here just a little bit more is packers, they're they're always pretty good about managing their summer supply.
• 8:38
  SPEAKER_01: And when we talk about summer, it's managing their Friday schedules, right?
• 8:41
  SPEAKER_01: Their Monday to Friday schedule.
• 8:42
  SPEAKER_01: We don't need Saturdays when we're into 2.4 and sub-2-4 seasonally adjusted kills.
• 8:47
  SPEAKER_01: But usually you got uh one or two packers that are always every year really good at it.
• 8:52
  SPEAKER_01: But we're hearing about multiple packers um already starting to pare down and adjust their summer kill schedules, right?
• 8:59
  SPEAKER_01: And that's because they're the we're we're gonna drop seasonally, and then you've got the health variable on it, right?
• 9:04
  SPEAKER_01: Coming into it.
• 9:05
  SPEAKER_01: You've got high beef prices, like you said.
• 9:07
  SPEAKER_01: Pork is a great value proposition in there.
• 9:10
  SPEAKER_01: Pork's done a great job in demand.
• 9:12
  SPEAKER_01: Um, other ways we can cook pork, use pork, ground pork, pork is an ingredient and whatnot.
• 9:17
  SPEAKER_01: So, you know, as we look at this thing, we're you know, we we continue to have some optimism moving to this market.
• 9:23
  SPEAKER_01: The the board does too.
• 9:24
  SPEAKER_01: It just needs that front end to kick to really fire it back up.
• 9:27
  SPEAKER_01: And, you know, uh, you know, where this thing's positioned.
• 9:30
  SPEAKER_01: Um, I think we're you know, we're in a good spot.
• 9:33
  SPEAKER_01: We got some really good things looking ahead for us here, Mike.
• 9:36
  SPEAKER_02: So it should I be concerned?
• 9:38
  SPEAKER_02: Because at some point here, I do think you'll find less pigs, and I think you will get uh cut out to move higher.
• 9:45
  SPEAKER_02: And belly's been a problem on that, right, lately, which I think eventually that will be.
• 9:50
  SPEAKER_01: And yeah, and problem is yeah, is is that's the right way to describe it, but it's not a disaster problem.
• 9:56
  SPEAKER_01: And and bellies should take care of themselves as we move into something.
• 10:00
  SPEAKER_02: They're gonna eventually fix it.
• 10:01
  SPEAKER_01: But that's just the thing.
• 10:02
  SPEAKER_01: It's just it's when we talk about the meat trade.
• 10:04
  SPEAKER_01: I it's it's like nobody's like, yeah, meat's in trouble, the pork cutouts in trouble.
• 10:08
  SPEAKER_01: It's just it's just not hot yet, right?
• 10:09
  SPEAKER_01: And we we just went through Mother's Day, you know, we've had we've had this up and down temperature, right?
• 10:14
  SPEAKER_01: Um, we're still been around these two, four, five kills.
• 10:17
  SPEAKER_01: It was we need the temperature to turn, it looked like it get more people out grilling.
• 10:21
  SPEAKER_01: We need to get down Memorial Day, get down to those two, four, sub-two, four kills.
• 10:25
  SPEAKER_01: And then we, you know, I think everybody feels in the trade it's gonna pick up then.
• 10:29
  SPEAKER_01: Yep.
• 10:29
  SPEAKER_01: It's just we we just we get half a million pigs off the market each week.
• 10:32
  SPEAKER_01: That's a big deal, right?
• 10:34
  SPEAKER_02: So, how uh that's the thing.
• 10:35
  SPEAKER_02: So that probably I think at least eventually we'll get into that.
• 10:39
  SPEAKER_02: How how much more down can this thing because that's the question, right?
• 10:43
  SPEAKER_02: Like, how much do we tear off before we come back on this thing?
• 10:47
  SPEAKER_01: Uh yeah, I think we'll ebb and flow a little bit here.
• 10:50
  SPEAKER_01: And I mean, of course, I think the June's the one that you're gonna see, you know, if if there's some down pressure, and not that the July and August won't cover it, right?
• 10:56
  SPEAKER_01: But I mean, we could cutout needs to respond for June to to hold this kind of premium to it.
• 11:01
  SPEAKER_01: And yeah, I mean, we you know, we we do have four weeks left, right?
• 11:05
  SPEAKER_01: So it's not like we don't have time and whatnot, but it's you know, it's just that June's got to kind of be tethered to that.
• 11:10
  SPEAKER_01: And uh the cash is for cash, you know, cash has been a dollar, dollar and a half higher, right?
• 11:15
  SPEAKER_01: We need we need that week when cash rips four or five bucks, right?
• 11:18
  SPEAKER_01: We need that week when cutout rips four or five bucks.
• 11:21
  SPEAKER_01: And I don't think this is the week cutout rips, right?
• 11:23
  SPEAKER_01: I mean, and I'm not sure it's next week, but you know, you get through Memorial Day, good weather, get into lower supply.
• 11:28
  SPEAKER_01: Things can change in a hurry, and history shows that, right?
• 11:32
  SPEAKER_01: So and the board sees that it just it it needs, you know.
• 11:35
  SPEAKER_01: As you've mentioned, there's been lots of spot for money to go, and the grains, the oils, the energies, and getting in can cattle be getting a lot of the money, and hogs have been shedding a little bit of contract, just kind of building up and waiting.
• 11:45
  SPEAKER_01: But when it turns, I you know, I think we're we're wearing for a nice little recovery here.
• 11:49
  SPEAKER_01: I think I like the way the pork caught the porks the pork is structured.
• 11:53
  SPEAKER_01: I also, you know, further out, we're optimistic.
• 11:55
  SPEAKER_01: And you know, we talked about just continuing health challenges here.
• 11:59
  SPEAKER_01: I mean, that bodes well not only for July and August, but October, December, maybe even the February contract.
• 12:04
  SPEAKER_01: That I'm a little ahead of myself.
• 12:06
  SPEAKER_01: But the hog market sees optimism.
• 12:08
  SPEAKER_01: We need to keep our salherd around and stable, and right now, and you go, I mean, next April's trading 90, 90, 60, next May's trading like 93.40.
• 12:16
  SPEAKER_01: That's that's higher than where we expired this year, right?
• 12:19
  SPEAKER_01: So the fur outboard still is offering some nice floor levels as well, right?
• 12:23
  SPEAKER_01: That we need to kind of look at it.
• 12:24
  SPEAKER_01: You have a 92 or 93 dollar floor, that that also works really well for our business next summer, right?
• 12:29
  SPEAKER_02: That it does.
• 12:30
  SPEAKER_02: All right.
• 12:31
  SPEAKER_02: Any other final thoughts before we hop off?
• 12:33
  SPEAKER_01: Yeah, just no, I just keep coming, keep rolling.
• 12:35
  SPEAKER_01: I think we want to switch a little bit to World Pork Expo coming up here soon.
• 12:39
  SPEAKER_01: Um, that's be the last thing I'd uh I'd throw out.
• 12:41
  SPEAKER_01: So huge event.
• 12:43
  SPEAKER_01: Everybody in the pork industry uh knows about this.
• 12:45
  SPEAKER_01: If you don't, uh come in.
• 12:47
  SPEAKER_01: It's it's June 3rd and 4th uh in uh Des Moines, Iowa.
• 12:51
  SPEAKER_01: Uh a great event, well attended, uh lots of people, lots of fun, lots of technology, lots of interaction there.
• 12:58
  SPEAKER_01: So um want you guys all to come to that.
• 13:00
  SPEAKER_01: We've got our staple, our hospitality tent, same spot as always, tent uh G4, G420.
• 13:06
  SPEAKER_01: But we've upgraded this year.
• 13:08
  SPEAKER_01: Um, and so we've always had really good uh participation and people spending time with us.
• 13:13
  SPEAKER_01: Um and we wanted to take it just a little bit level higher.
• 13:16
  SPEAKER_01: And so right behind our tent, uh jalapeno peats, those that go to the Iowa State Fair would know that place well.
• 13:22
  SPEAKER_01: Um, we're gonna have a we're gonna have a party, Mike.
• 13:24
  SPEAKER_01: Um, it's gonna start around 3:30 and it's gonna go well into the evening.
• 13:28
  SPEAKER_01: Uh, we're gonna call it Fiesta Day Pig.
• 13:30
  SPEAKER_01: It's open to customers, friends, allied industry.
• 13:33
  SPEAKER_01: I want to really want to get the word out and really celebrate the pork industry and and have some fun celebrating this delicious product we all work so hard to make, Mike.
• 13:41
  SPEAKER_02: Well, I know I'm gonna be there.
• 13:42
  SPEAKER_02: I can't wait.
• 13:42
  SPEAKER_02: We're gonna host some shows live from the tent as well.
• 13:45
  SPEAKER_02: Kate, I uh have some guests on as well.
• 13:48
  SPEAKER_02: So please, if you're a fan of the show, tune into that.
• 13:51
  SPEAKER_02: Stop by.
• 13:52
  SPEAKER_02: Um you might get interviewed though.
• 13:54
  SPEAKER_02: So no promises there.
• 13:56
  SPEAKER_02: But all right, thank you for your time, everybody.
• 13:58
  SPEAKER_02: Please click the link on the description below to get the daily market commentary and other fascinating marketing info that we send out each and every day.
• 14:06
  SPEAKER_02: Uh, please go to our website as well and check that out at uh professional agmarketing.com.