The price of hog futures contracts has been stable since the end of this year.
Tyler Fulton is the director of risk management at Hams Marketing Services.
“We’ve seen a fair amount of volatility on a daily basis, but they don’t trend one way or the other,” he said. “Whatever they seem to lose one day, they’ll get it back the next day and it doesn’t just come from the volatile pork complex but the Canadian dollar also fluctuates wildly and that has an impact directly affect forward prices.
“We saw a lot of activity from hedging producers in October during the winter, and that was driven by the fact that their futures prices were exceptionally good relative to market trends,” said Fulton. normal cash market in that time frame. It is important to note that we are looking at feed prices particularly high, he added, noting that the margins are not great, but they are still good and there is some room for a bit of profit. profit.
“It’s a big threat to operations if you’re just looking at one side or the other of the feed relative to your output price, which is pigs,” added Fulton.
Fulton said that the US cash market has been seeing a lot of impact recently from the sharp increase in pork prices. Over the past four weeks or so, we’ve seen an uptrend in pork prices with little volatility between different cuts. He says this is a more typical trend you’ll see this time of year.
“Typically we have a moderate starting hog population and we are also starting to see some stronger demand from the roasts and so seeing some support in pork prices by cash is pretty typical Given that we have a lot of influence when producers actually get paid for their pigs, most of the contracts are referring to the wholesale pork price. wholesale pork is more stable, it will translate to hog prices reflecting that immediately.”
Earlier this spring, we saw an off-season move of weakness. That appears to be behind us and with hog numbers a little tighter and some good demand, Fulton is generally optimistic that the rest of June and July will be fine.