By Bruce Cochrane.
The Director of Risk Management with h@ms Marketing Services says a counter seasonal rally in live hog prices late in the fourth quarter of 2016 suggests the market may have turned a corner.
The fourth quarter of 2016 saw surprisingly large live hog numbers.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services says most analysts were expecting two to three percent more market hogs coming to market than year ago levels but we saw closer to four and a half percent, reaching as high as six percent higher in some weeks and prices bottomed out just after the U.S. thanksgiving before rallying over the last month in spite of continuing high slaughter numbers.
Tyler Fulton-h@ms Marketing Services:
The cash market over the course of last several weeks has increased by more than 20 dollars per CKG in Canadian dollars and that is quite counter seasonal given that we typically see pressure as we approach and move through the Christmas time frame so it's remarkable really.
It's hard to put your finger on exactly what the rationale was there, especially because recent evidence suggests that maybe exports haven't been performing quite as well as what they were earlier in the time frame.
So we may have turned a corner.
More recently prices are down a little bit and maybe there is a concern that, unless we see some improvements to export markets, we might see a bit of a downturn in mid-January or so.
Fulton says, as far as demand goes, there is reason for optimism but he advises producers to keep an eye on export demand.
Source: Farmscape