Analysis: Hogs & Pork

Hogs Continue To New Lows Ahead of The Weekend

Sep 22, 3:12 pm | Hogs & Pork

Hog futures were sharply lower at Friday’s open and traded lower all day. October hogs again marked new contract lows, while December had light support just above last week’s low. The hog index was $.80 lower on Friday at $60.12 and projected $1.05 lower for Monday, putting the index under $60 for the first time since April.   The pork cutout was firm Friday morning, though the belly value continues to trade under $100. However, the carcass value continues to trade at more than a $13 premium to cash hog prices, giving packers an estimated margin near $31/head.   NASS will release the September inventory report next week, and quieter trading is expected in the last half of next week….

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Hogs Fall Sharply Through Thursday

Sep 21, 3:58 pm | Hogs & Pork

Hogs were down slightly at the morning open, and fell sharply through the day as Wednesday’s technical related support disappeared. December gave back all of the early week gains and closed back under $58, while the cash trends remain down. The hog index was off $.96 at $60.92, and projected $.76 lower for Friday for a weekly decline of $5.      The Actual Slaughter Report with data for the week ending September 9th showed that barrow/gilt average carcass weights jumped 3 Lbs over the previous week to 209 Lbs. Weights were the heaviest since mid-May, and also above a year ago for the 5th consecutive week. Cool August temps across the Cornbelt offered ideal hog feeding conditions, and weights…

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Hogs End Sharply Mixed At Midweek

Sep 20, 3:19 pm | Hogs & Pork

It was a sharply mixed day of trade in the hog market that left October just above contract lows at the close, while the rest of the market posted modest gains. Open interest in October hogs has been declining since the index fund roll earlier this month, but remains historically large. At the end of Tuesday’s trading, the CME reported total October open interest at 61,407 contracts versus just over 40,000 contracts a year ago. The chart shows that total hog market open interest has been at multi year highs since June, and the largest since 2013.   The cash hog and pork markets continue to trade weaker with the hog index down $.92 on Wednesday at $61.88, and is…

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Hogs Close Firm At The End of Tuesday Trade

Sep 19, 3:40 pm | Hogs & Pork

Hog futures were steady at Tuesday’s open, and finished from steady in October to as much as $1.675 higher in December. The hog index continues to work lower and was down $1.27 at $62.80 and projected $.95 lower for Wednesday, while the cutout was down $1.77 at a 5 month low of $76.32.        The pork belly value has pushed under $100 this week and also broke under trend line support. The next target is at last year’s seasonal low near $80. The September Cold Storage Report will be released Thursday afternoon, and is expected to show an increase in belly stocks from last month, though supplies are likely to remain well under a year ago. Following this year’s…

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Hogs Correct From Friday’s Short Covering Rally

Sep 18, 4:31 pm | Hogs & Pork

Hogs were lower at the open on Monday and were in the red for most of the day, with Oct and Dec contracts each finding resistance against unchanged. The hog index was down $1.08 at $64.07, and projected $1.27 lower for Tuesday.   Negotiated trade continues to weaken and was quoted $.78 lower for Monday, while the pork cutout gained $.33 to $78.09 on stronger belly and rib prices. The spread between the cutout value and the lean hog index was at 14/cwt, for an estimated slaughter margin near $30/head.     Last week’s hog kill was the largest of the year at 2.432 million head, and an expanded kill is expected for this week. As of Monday morning, packers…

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Hog Futures Rally Sharply On Hope of a Seasonal Bottom

Sep 15, 4:57 pm | Hogs & Pork

  CME hog futures posted strong gains with October closing at $58.47, up $1.95 on short covering amid the hope that a seasonal cash low was near. ARC suspects that such “hope” is premature. October CME hog futures is nearing an open chart gap that was left back in early September at $61.075, and larger runs appear to lie ahead with cooler Midwest temps and a new corn crop.   Daily pork product prices closed lower with the carcass cutout under pressure due to a further slide in cash belly bids. Cash bellies have shed another $2.84/pound to $101.69. Friday’s carcass cutout closed at $77.36, down $1.93 at the lowest level in months. The last time that the US hog cutout…

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Hogs Trade Mixed, End Lower; Excessive Supply Weighs On Cash Hogs

Sep 14, 4:56 pm | Hogs & Pork

CME hog futures continued to decline with runs/slaughter running at historically high levels. Record amounts of US pork production are forecast for the next 9 months and US export demand will have to improve to move through the supply.  Daily pork product prices closed lower by with the carcass under pressure due to the sharp slide in cash belly bids. Cash bellies have shed $.80/pound since its August top and a further drop to $.92-.96 in the composite is anticipated. The belly market has been the bell weather for CME hog futures.   The monthly hog chart to the left offers the potential to form a head and shoulders bottom. It’s likely that spot futures could drop to $51-53 for…

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Hogs Trade Mixed, End Lower

Sep 13, 2:46 pm | Hogs & Pork

A sharply lower start to the morning in the hog market found good support that closed the gap left at the morning open, and briefly had the market higher for the day. However, the market found limited follow through, and hog futures were lower at the close. The hog index was down $.54 at $67.38, and projected another $1.01 lower for Thursday.   Fund length in the hog market topped out late July and was the largest since 2013, and at that time hedgers had the most pork sold in a year. Liquidation started to pick up in late August, and through last week fund length was down 29% from the July high. The chart shows both fund and hedger…

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Hogs Turn Down In Technical Trade and Weak Cash Trade

Sep 12, 3:46 pm | Hogs & Pork

Following quiet trade on Monday, hog futures gapped lower at Tuesday’s open and continued to move lower through the day. At the close, October was off more than $2 and just under $60, while the hog index was down $1.02 at $67.92.   The USDA made only modest changes to the pork estimates. 2017 production was increased slightly on higher than expected carcass weights, while first quarter ‘18 production was barely changed lower. Record large production is expected to continue through the 1st half of next year. Jan-Mar production is forecast at 102% of 2017 and Apr-Jun at 104%. However, more significant changes are expected in October, once the results of the September inventory report are made available.   The…

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