Hog Futures Drop on Curtailed Demand: CME hog futures were lower on Tuesday, with December marking the lowest close for the month. Fund demand has subsided as October expired, while the cash index continues to trend lower. The cash hog index was down $.13 on Tuesday at $84.16, and AgResource estimates a $.08 decline for Wednesday.
Hog slaughter on Tuesday totaled 487,000 head, putting the early week total up 5,000 head from last week. At mid-month, the cumulative October hog kill stands at 5.645 Mil head, up 463,000 head or 9% from last year, and the largest mid-month total in 4 years. In 2020, the market was still working through backed-up supplies from the pandemic. 2019 is the only other year that true hog numbers were larger.
Hog supplies are larger than a year ago, while last week’s slaughter report showed that carcass weights were 1 Lb heavier than a year ago. Slaughter rates look to expand into the 4th quarter, while carcass weights will further gain on cooler temperatures and new crop grain inclusion in feed rations. Domestic demand is recovering, but December hogs could hold as much as $10 of downside risk.