Lean Hog Futures Fall as Wholesale Pork Prices and Slaughter Numbers Drop
Lean Hog Futures (CME:HE1!) traded lower during Monday midday action, with active contracts falling between 17 and 32 cents. December contracts declined 17.5 cents to $66.750, while February contracts dropped 20 cents to $69.025 and April contracts fell 32.5 cents to $74.350. Overall market prices declined nearly 0.9% during the session.
Weakness in wholesale pork values weighed on the market. The pork carcass cutout value dropped $1.35 in morning trading to $79.20, led down by lower prices for picnic, ham, and belly primals. Although the national base hog price rose $1.64 to $71.99 on Monday morning, the CME Lean Hog Index dropped $1.64 to $74.19. Additionally, money managers added 6,816 contracts to their net short position, expanding it to 42,088 contracts.
Investors will be tracking processing rates and wholesale carcass values to see if market prices regain footing. Weekly federally inspected hog slaughter dropped to 2.553 million head, down 66,000 head from the previous week and 35,907 head below the same period last year. Future trading activity will depend on whether reduced slaughter supply offsets soft wholesale demand.
Key points
- Lean Hog Futures (CME:HE1!) fell during Monday midday trading, with contracts dropping between 17 and 32 cents.
- The wholesale pork carcass cutout value decreased by $1.35 to $79.20, led lower by picnic, ham, and belly primals.
- National base hog prices increased by $1.64 to $71.99, while the CME Lean Hog Index slipped $1.64 to $74.19.
- Weekly inspected hog slaughter dropped to 2.553 million head, down 66,000 head from the previous week.
- Managed money accounts expanded their net short position in lean hog futures and options by 6,816 contracts to 42,088 contracts.
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How we writeDisclaimerQuestions and answers
Why are lean hog futures declining?
Lean hog futures are falling due to lower wholesale pork cutout values, which dropped $1.35 to $79.20, alongside an increase in speculative net short positions held by money managers.
What is the current slaughter rate for hogs?
Estimated federally inspected hog slaughter for last week stood at 2.553 million head, reflecting a decrease of 66,000 head from the prior week and 35,907 head below the same week last year.
How are cash hog prices performing compared to futures?
The national base hog price rose $1.64 on Monday morning to $71.99, while the CME Lean Hog Index fell $1.64 to $74.19. Meanwhile, futures contracts traded 17 to 32 cents lower across active months.