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 estimated to be another $.94 weaker for Thursday. Negotiated hog trade was also down $.90 on big volume, while the cutout was down just 4 cents.
December hogs closed out a small chart gap on Wednesday, and our view remains bearish on any further strength ahead of next week’s inventory report.