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 hog outlook stays bearish, with sales through the early weeks of 2018 advised on rallies ahead of the inventory report.