Lean Hog Futures See Midday Increase Despite Early Losses
Market Trends Reflect Mixed Inventory Data and Lower Pork Stocks
Lean hog futures experienced a midday rise in prices, rebounding from an earlier dip. The February contracts are up 27 cents, while other front months saw declines ranging from 35 to 62 cents. The CME Lean Hog Index stood at $84.35 on December 19, showing a slight increase of 14 cents from the prior day.
The USDA’s recent quarterly Hogs & Pigs report revealed a downward revision of the September 1 inventory by 385,000 head. As of December 1, the total inventory reached 75.845 million head, marking a 0.51% increase from last year and exceeding market estimates. Breeding hogs rose by just 5,000 head to 6.004 million, consistent with industry expectations. Meanwhile, market hogs increased by 0.514% to 68.841 million head, surpassing the forecast of a 0.1% increase. The pig crop from September to November also showed an uptick, climbing 2.03% to 35.238 million head, aided by a 2.2% rise in pigs per litter to 11.92. Looking ahead, farrowing intentions for December through February grew by 0.03% to 2.93 million head, while the March to May projections rose by 1.37% to 2.953 million head.
According to NASS Cold Storage data, pork stocks stood at 391.08 million lbs on November 30. This figure represents an 8.27% decrease from the previous month and a 5.91% drop compared to last year. This is the lowest level recorded for any month since August 2010, and the tightest November totals since 1997.
Due to the holidays, the USDA’s FOB plant pork cutout report will not be available on Tuesday or Wednesday. The report released Monday afternoon noted a decrease, with values down $2.66 to $96.62 per cwt. All primals reported lower prices, led by bellies which dropped $9.35. Additionally, USDA estimated the Monday federal inspected hog slaughter at 490,000 head, up by 3,000 compared to last Monday and significantly higher than the same day last year, likely influenced by the upcoming Christmas holiday.
Feb 25 Hogs are currently priced at $84.650, showing a gain of $0.275,
Apr 25 Hogs are priced at $89.275, decreasing by $0.350,
May 25 Hogs now sits at $92.700, down $0.625.
On the date of publication, Austin Schroeder did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
