Latest / Professional Ag Marketing Podcast / Hog Market Prepares for Mexico Trade Talks | Hog Talk February 17th, 2026

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Hog Market Prepares for Mexico Trade Talks | Hog Talk February 17th, 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.
• 0:20
  SPEAKER_02: Today is February 17th.
• 0:22
  SPEAKER_02: I've got Pat back with us this week.
• 0:24
  SPEAKER_02: How's it going, Pat?
• 0:25
  SPEAKER_02: Good, Mike.
• 0:25
  SPEAKER_02: How are you today?
• 0:26
  SPEAKER_02: Very good.
• 0:27
  SPEAKER_02: Well, let's talk about the hog market here this week, Pat.
• 0:30
  SPEAKER_02: Last time we had Luke coming on board.
• 0:33
  SPEAKER_02: He was talking about the start, kind of middle of a sell-off that we had occurring through the hog market, reaching a little bit of resistance.
• 0:39
  SPEAKER_02: Here today, we saw a little bit of reversal in that action, didn't we?
• 0:43
  SPEAKER_01: Yeah, we did.
• 0:44
  SPEAKER_01: Uh finally had a little bit of an update here after a pretty significant sell-off as we went through the balance of the last half of last week.
• 0:53
  SPEAKER_01: And um really a futures market that we've probably seen a little bit of sell-off from manage money, index fund money was uh up around 133,000 or so on last uh last Tuesday, and the numbers were released on Friday.
• 1:08
  SPEAKER_01: And so that's near a record?
• 1:10
  SPEAKER_01: It's close to record, and and uh probably we were due for just a little bit of correction because we've been seeing those guys pile into this market uh pretty significantly for a while here now, and really a nice opportunity that was offered to us as hog producers on that forward curve as we really look out, you know, from April all the way through to uh uh December and beyond.
• 1:31
  SPEAKER_01: And so um that type of opportunity probably wasn't gonna hang around forever.
• 1:35
  SPEAKER_01: So, so maybe this is just a good healthy correction.
• 1:38
  SPEAKER_01: Um, one thing though that I would note is that um, you know, we are in a time of year where we do start to see, you know, a little bit flatter markets there.
• 1:47
  SPEAKER_01: And maybe you can show those pork cutout numbers, Cade.
• 1:50
  SPEAKER_01: But I, you know, we're uh it's not at all uncommon for us to see a fairly flat market here from Feb expiration through April expiration and sometimes beyond.
• 2:01
  SPEAKER_01: Pretty, pretty flat trend there, isn't it?
• 2:03
  SPEAKER_01: And so, and so maybe, you know, when that April contract in particular was showing uh uh a$10 or so uh premium uh to the index, that was a little staunch given um historic seasonals for this time of year.
• 2:17
  SPEAKER_01: And you know, we try to blame that, and to some extent it's true, right?
• 2:22
  SPEAKER_01: We've got the Lenten season starting here on Wednesday with Ash Wednesday, and and so that that whole time frame's a little bit early this year.
• 2:29
  SPEAKER_01: And we just you know talk about uh you know no meat on Friday for the Catholics and and uh and all of that as having uh a bit of a hamper on meat demand, but it's also just the time of year, right?
• 2:39
  SPEAKER_01: I mean, we're we're past our holiday seasons and and uh a little too early for spring, although my twins did get nine holes of golf in on Friday here in Laverne.
• 2:49
  SPEAKER_01: So nice out.
• 2:50
  SPEAKER_01: Isn't that crazy?
• 2:50
  SPEAKER_01: Or Saturday, Valentine's Day, they're out golfing in in Laverne, Minnesota.
• 2:54
  SPEAKER_01: That's pretty cool.
• 2:55
  SPEAKER_01: But anyway, just saying that um um this is the time of year where we are just a little bit stagnant on demand and still plenty of uh pork production sort of hitting the market here.
• 3:05
  SPEAKER_01: And so um perhaps where the futures market is hanging out today is a bit more representative of spot fundamentals.
• 3:13
  SPEAKER_01: Um cutout does seem to be hanging out in that$95 area and pretty consistently.
• 3:19
  SPEAKER_01: No real concerns there, um, uh Mike.
• 3:22
  SPEAKER_01: You know, we did see a little bit of a drop in rib primals um month over month, but for but from some very significant levels.
• 3:31
  SPEAKER_01: And I don't know if you can pull up that rib primal in power or not, but uh um uh Kate, but that that uh um that one was really impressive, right?
• 3:40
  SPEAKER_01: For the for the time of year that it is.
• 3:41
  SPEAKER_01: And this correction, still the the level that it's at is is from a historic perspective still still pretty impressive, but uh um it is it is a decent little correction from there.
• 3:52
  SPEAKER_01: So seen ribs come down, bellies kind of come back up a little bit.
• 3:55
  SPEAKER_01: There's the rib graph, thank you.
• 3:56
  SPEAKER_01: Um see that little break we've had on um and over the last three or four weeks or so.
• 4:01
  SPEAKER_01: Um bellies have seen a little bit of appreciation, yeah, you know.
• 4:05
  SPEAKER_01: So and then I think the other thing that I'd like to talk about is hams just a little bit, if we could.
• 4:10
  SPEAKER_01: Um and and uh mostly as that sort of wraps around, and let's see, we've had a flat market there so far, and really good disappearance on hams into that Mexico market.
• 4:21
  SPEAKER_01: And so one of the things that have been popular talking points over the last couple weeks at the Minnesota Pork Show and and also the Iowa pork show, it's not a popular topic, but it certainly has been one that's been talked about a lot, and that's our uh engagement relationship with Mexico.
• 4:37
  SPEAKER_01: Are you worried about that?
• 4:38
  SPEAKER_01: I'm a little worried about that.
• 4:39
  SPEAKER_01: We've got a uh uh and maybe a little more than worried about that is is the right description because we're um you know, we're very reliant upon that market, you know, as it relates to uh um to pork trade here, corn trade.
• 4:52
  SPEAKER_02: Really a lot of commodities.
• 4:54
  SPEAKER_02: They buy a lot of stuff.
• 4:55
  SPEAKER_01: Yes, corn trade too, for that matter, for sure.
• 4:58
  SPEAKER_01: And and so and so we'll see.
• 5:01
  SPEAKER_01: Well, you know, we've got a couple pending things that are coming up here, three uh that that are of primary importance that we care the most about, I suppose.
• 5:08
  SPEAKER_01: The first one is is the issue of the border and feeder cattle and screw worm and all of those things, and and you know, our contacts in the cattle industry, you know, think that there's something that could happen by spring there as it relates to that border opening, reopening.
• 5:23
  SPEAKER_01: Um, interesting to keep an eye on for sure.
• 5:26
  SPEAKER_01: The second one is is the anti-dumping case that that Mexico has levied upon us, and a response is necessary over the next 60 days or so.
• 5:36
  SPEAKER_01: And that's on pork, right?
• 5:37
  SPEAKER_01: And that's not on pork, thank you.
• 5:39
  SPEAKER_01: Yes.
• 5:40
  SPEAKER_01: And then the third thing is is just the USMCA agreement, Mexico-Canada US agreement, um, is up for renegotiation this summer as well.
• 5:50
  SPEAKER_01: And so when I think about um Trump trade, tariffs, talks, discussions, um, we know Trump's behavior, right?
• 6:00
  SPEAKER_01: He'll punch and he punches hard, right?
• 6:02
  SPEAKER_01: And if we just think about how Mexico has reacted to the punch and counterpunch compared to Canada, right?
• 6:10
  SPEAKER_01: Canada's had a tendency to kind of I don't know, complain about bourbon and all these things.
• 6:15
  SPEAKER_01: But but Mexico has been a little more a little more uh thoughtful about how they respond to the punch-counter punch.
• 6:24
  SPEAKER_01: And so I'm um I do have some concern, I suppose, that that uh um as we are leading up to you know this summer and our midterms and those sorts of things, that Mexico might use some of these pending uh items of of topics that need to be discussed and figured out um to maybe try to gain some leverage in those negotiations and maybe hit back or punch back in into red states, which potentially could be some issues as it relates to ham disappearance or corn disappearance, those sorts of things.
• 6:52
  SPEAKER_02: What else is on your mind this week for the hog market?
• 6:55
  SPEAKER_01: Yeah, well, the supply side we haven't talked about yet, but we should.
• 6:58
  SPEAKER_01: Um we, you know, the popular discussions are all about uh you know the uh accelerated value of ice wines and and uh um and and how they're very tight for this time of year.
• 7:10
  SPEAKER_01: Um, and don't, you know, for the longest time, you know, when when ice weens kind of worked up to 100, even up to 110, you know, summer hogs are also trading at 110 and I and$4 corn, and I would say, well, yeah, that's a lot of money for an ice wing,$100 bill for every one of those little boogers that walks off the truck, but it kind of works, right?
• 7:30
  SPEAKER_01: Now you start talking, you're hearing about a hundred and hundred and twenty-eight dollar ice wings and now a correction in the summer markets, that doesn't work quite so well.
• 7:37
  SPEAKER_02: Well, now we're getting later into that marketing year too, right?
• 7:40
  SPEAKER_02: You're starting to push it back a little bit.
• 7:42
  SPEAKER_01: Yeah, good point.
• 7:43
  SPEAKER_02: So you're gonna start getting crunched on time to place those things too.
• 7:46
  SPEAKER_01: So so if we didn't have base going after baby pigs, yeah, if we didn't have space going after chasing baby pigs here before, we do now for sure, right?
• 7:55
  SPEAKER_01: And so so the supply side does seem to be a little bit tight.
• 7:59
  SPEAKER_01: Um, anticipating, you know, a little over 2.5 million harvest uh uh this week, weights are declining perhaps just a little bit more than what we'd like given the margin over feed here.
• 8:10
  SPEAKER_01: And so um, so maybe we have shackles um chasing uh pigs here just a bit too.
• 8:15
  SPEAKER_01: Um little bit more indication earlier this week as it relates to uh some cash trade as well.
• 8:20
  SPEAKER_01: So from a supply side perspective, Mike, uh things seem to be uh pretty solid.
• 8:25
  SPEAKER_02: Interesting.
• 8:26
  SPEAKER_02: Any uh specific numbers on just numbers right now?
• 8:30
  SPEAKER_02: Uh I know we've seen some interesting harvest speeds lately with some of the weather we had on the East Coast.
• 8:36
  SPEAKER_02: Any comments on total numbers up front here?
• 8:39
  SPEAKER_01: Yeah, I think well, um just the 2535 for the week is our guess.
• 8:43
  SPEAKER_01: That's 125,000 Saturday or something like that.
• 8:45
  SPEAKER_01: So I I think we're um we're we're probably it's aggressive enough given what we believe underlying supply to be.
• 8:52
  SPEAKER_01: Any final thoughts for well let's just talk about greens for a second, if we could, before we before we wrap this thing up.
• 8:57
  SPEAKER_01: What are the highlights for the week?
• 8:59
  SPEAKER_02: A few highlights here.
• 9:00
  SPEAKER_02: We continue to focus on South America's crop development.
• 9:03
  SPEAKER_02: South America, Brazil specifically, is 21% harvested on their soybean crops.
• 9:07
  SPEAKER_02: So they're getting a little bit behind pace, a little bit dry through their country.
• 9:11
  SPEAKER_02: They're looking for some rainfall over the near term.
• 9:13
  SPEAKER_02: We'll see if we can get a little bit, but it's not crucial.
• 9:16
  SPEAKER_02: They're planting corn right in behind that, basically starting their safrina crop, which makes up a big part of their crop.
• 9:22
  SPEAKER_02: So just a couple talking points with South America, the harvest that they're doing on soybeans as well.
• 9:27
  SPEAKER_02: They just moved up in last week's WASD to 180 million metric tons.
• 9:32
  SPEAKER_02: So very, very big crop.
• 9:34
  SPEAKER_02: It's massive, like over six and a half uh billion bushels down there compared to over four in the United States pat.
• 9:40
  SPEAKER_02: So that's getting a lot of talking points.
• 9:42
  SPEAKER_02: Uh soybeans in general have been the main focus point of the grain markets here ever since Trump talked about the consideration of China upping from 12 million metric tons, which would be 441 million bushels of purchases this year to up 293 above that.
• 10:00
  SPEAKER_02: Now uh the funds have found soybeans look a little bit sweeter.
• 10:04
  SPEAKER_02: That would make a tight balance sheet.
• 10:05
  SPEAKER_02: So the funds have been piling in here.
• 10:07
  SPEAKER_02: So Friday afternoon, I was really excited to see the commitment of traders report, and they had bought a significant amount of soybean contracts net long.
• 10:16
  SPEAKER_02: So it looked like the the soybean market had really been getting funds pile into it on that old crop months, and that usually makes sense.
• 10:24
  SPEAKER_02: When funds pile into something, they like to buy the first three, four months of it for sure.
• 10:27
  SPEAKER_02: And you've seen that.
• 10:28
  SPEAKER_02: So this the spreads have been very interesting because new crop didn't get that full appreciation.
• 10:34
  SPEAKER_01: Right.
• 10:34
  SPEAKER_01: And so yeah, and that front, we need to be careful of that because the funds are focused on a domestic balance sheet here that that is allegedly tightening based upon tweets, right?
• 10:45
  SPEAKER_01: And the global balance sheet is still somewhat comfortable.
• 10:49
  SPEAKER_01: Yeah, exactly.
• 10:50
  SPEAKER_01: Yeah, especially given what we believe are the prospects for South America's crop.
• 10:54
  SPEAKER_01: And so um, so you need so at least for our real crop friends, we need to be very, very cognizant of that.
• 11:00
  SPEAKER_01: A little bit longer term, though.
• 11:01
  SPEAKER_01: I I uh for end users, be incredibly careful about um the issue of complacency here, right?
• 11:09
  SPEAKER_01: We're kind of three years running in a couple different hemispheres of trend and above trend line crops, both commodities, all three commodities, whatever, right?
• 11:18
  SPEAKER_01: So we need to be a little bit careful that we don't get ourselves sort of into this false sense of security that uh um that we don't have anything to worry about from an input perspective.
• 11:29
  SPEAKER_01: Um, because we certainly do.
• 11:30
  SPEAKER_01: I mean, if nothing else um to expect, I mean, the weather isn't gonna stay this good um, you know, going going forward for sure.
• 11:38
  SPEAKER_01: So it's certainly uh worth being a little bit cautious on.
• 11:42
  SPEAKER_01: And we were looking at some some maps uh you know earlier today, and and uh um, you know, drop monitor maps in the United States in February aren't important, right?
• 11:51
  SPEAKER_02: Good time of the year to have to drought.
• 11:52
  SPEAKER_01: Exactly right.
• 11:53
  SPEAKER_01: But there is one in Illinois, and it's it's it's red, not yellow kind of a thing, right?
• 11:57
  SPEAKER_02: And even last fall, I remember somebody yesterday at the crop shop that I spoke at uh by Meno, South Dakota, they pulled up a deal that it was the basically the driest in the last hundred some years through the through the most of the fall months through harvest uh for most of the Northwest Corn Belt, especially, hence why we had a fast harvest this last year.
• 12:16
  SPEAKER_02: So we went into this winter pretty dry.
• 12:19
  SPEAKER_02: This winter has been pretty dry, other than a quick two-week cycle there.
• 12:23
  SPEAKER_02: Right.
• 12:24
  SPEAKER_02: Uh we'll see what happens.
• 12:26
  SPEAKER_01: Weather patterns are gonna have to change.
• 12:27
  SPEAKER_01: It's gonna be interesting.
• 12:28
  SPEAKER_02: Yeah, see any delayed plannings, etc.
• 12:31
  SPEAKER_02: So those are a few things that folks are focusing on uh in the road crop today.
• 12:35
  SPEAKER_01: Sounds good.
• 12:36
  SPEAKER_02: All right, thank you for your time, Pat.
• 12:37
  SPEAKER_01: Thank you.