Hog Rally Slows as December Nears a 4-Month High: CME hog futures were higher in early trade on Tuesday, but gains were pared back ahead of the close. December hogs stopped just short of $76 with increased producer selling on the rally, ahead of Thursday’s inventory report.
The CME cash hog index was down $.07 at $84.29, and AgResource estimates an $.08 decline for Wednesday.
NASS will release the September Hogs and Pigs report on Thursday. Ahead of the report, the average trade estimate calls for the Sep 1 all hog inventory at 100% of a year ago. The breeding herd is expected at 98% of last year, which would be the smallest since 2016. The market hog inventory is expected to be less than 1% larger than a year ago but would be the largest in 4 years. The consensus on summer farrowings is for a 1.4% decline, while pigs per litter are expected to have increased 1% over a year ago to a record large 11.7 pigs.
AgResource is bearish on the recent rally. Domestic demand has improved in recent months, but outside of a major inventory surprise, 4th quarter production will be 4-5% larger than a year ago, with a slower export outlook to pressure demand.
