Farmscape for September 29, 2020
The Director of Risk Management with HAMS Marketing Services says the just released USDA Quarterly Hogs and Pigs Report has slowed the dramatic improvement in hog prices evident over the past two months.
The U.S. Department of Agriculture released its Quarterly Hogs and Pigs Report last week.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says some of the broader numbers, such as the breeding herd and the total marketing herd, were about what was expected but the heaviest weight categories were nine percent larger than year ago levels while the lighter weight categories were nearly three percent lower than year ago.
Clip-Tyler Fulton-HAMS Marketing Services:
What we've seen is a really strong run up over the last two months in prices to the point where we are actually looking at futures values that are 25 percent higher than they were two months ago.
Some of that is associated to the supply changes that was revealed in the latest Hogs and Pigs Report.
We're starting to see a moderation of futures prices after the report results came out, which is now a couple of days of trading since then and so I think we possibly may have put in some near term highs, especially on the futures months that represent what remains of 2020.
The quick way of saying it is the market is a lot better than it was two months ago and, when you look into 2021, there's definitely reason for optimism because we actually have some extended periods of time where we think that producers will return to profitability and that was not in the cards even just a month ago.
Fulton says producers are taking prudent action to build their forward positions, especially capturing those periods where they can realize some profits.
He acknowledges it's not great profitability but, in these uncertain times, producers are taking advantage of it.
For more visit Farmscape.Ca.
*Farmscape is a presentation of Wonderworks Canada Inc.