Lean Hog Futures Decline Amid Mixed Supply Data
Market Update: Prices and Inventories Shift
Lean hog futures ended Monday’s trading session down 47 cents, settling at $1.55, with the February contracts taking the lead. Meanwhile, the national average base hog negotiated price rose to $79.56 on Monday afternoon, a $2.61 increase from the previous day. The CME Lean Hog Index stood at $84.35 on December 19, marking a 14-cent rise from the day before.
In an updated quarterly Hogs & Pigs report, the September 1 inventory was revised down by 385,000 head. As of December 1, the inventory was recorded at 75.845 million head, reflecting a 0.51% increase from last year and surpassing estimates. Breeding hogs increased by just 5,000 heads to 6.004 million, aligning with trade predictions. Market hogs saw an uptick of 0.514%, reaching 68.841 million head, which also exceeded the expected increase of 0.1%. Additionally, the pig crop from September to November rose by 2.03% to 35.238 million head, with pigs per litter increasing by 2.2% to an average of 11.92.
Farrowing intentions for the December to February period were slightly higher, up 0.03% at 2.93 million head, while the March to May period saw an increase of 1.37% to 2.953 million head.
According to NASS Cold Storage data, the pork stocks on November 30 were at 391.08 million pounds, reflecting an 8.27% decrease from the previous month and a 5.91% decline compared to last year. This marked the lowest pork stock total for any month since August 2010 and the tightest November total since 1997.
The USDA reported a lower FOB plant pork cutout value on Monday afternoon, dropping by $2.66 to $96.62 per cwt. All primals decreased in value, with belly prices leading the decline, down $9.35. The USDA’s estimated hog slaughter for Monday was 490,000 head, which is 3,000 head higher than the same Monday last year, driven by increased demand around the Christmas holiday.
Feb 25 Hogs closed at $84.375, down $1.550.
Apr 25 Hogs closed at $89.625, down $0.900.
May 25 Hogs closed at $93.325, down $1.025.
On the date of publication, Austin Schroeder did not have (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.
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