Pigs Aim to Complete the Week on Friday
In the ever-changing world of agricultural commodities, the lean hog futures market has been experiencing a rollercoaster ride in recent weeks. The market trend has largely been volatile with a recent downward bias, showing some temporary bullish momentum but overall declines in prices.
On Thursday, lean hog futures closed at $108.775. This comes after a week that saw the hog slaughter total reach 1.837 million head, a figure that is slightly higher than the same period last year but uneven overall.
The USDA's FOB plant pork cutout report also revealed a decline, standing at $116.33 per cwt on Thursday PM. This downward trend is reflected in the CME Lean Hog Index, which dropped to $109.60 on August 5, marking an 18–43 cents decrease.
Market volatility and shifting supply-demand conditions are key factors influencing these recent price movements. The USDA's national base hog prices have seen modest increases at times, such as $112.41, but the CME Lean Hog Index has generally trended downward. The FOB plant pork cutout values have mostly declined, with certain pork cuts like picnic and belly driving prices lower, while occasional gains in ribs or ham provided partial support.
Hog slaughter estimates have varied, sometimes above last year’s levels and sometimes below, affecting market supply balance. Internationally, China, the world’s largest pork producer and consumer, is urging producers to reduce breeding herds by about 2% to reduce oversupply and support prices. However, China’s pork prices have dropped about 20% in the past year amid slowing domestic consumption and economic headwinds, adding uncertainty to global pork markets.
In a broader context, while lean hog futures have been volatile, live cattle futures have hit record highs recently, providing a bullish reference point for some hog futures participants.
This week, the hog slaughter was 7,000 head below last week, and the USDA's national base hog price stood at $111.22 on Thursday afternoon. Export Sales data showed 30,996 MT of pork sold for 2025 in the week of July 31, with export shipments reaching 28,181 MT during the same period.
It's important to note that all information and data in this article is solely for informational purposes. The author, Austin Schroeder, holds no positions in securities mentioned in this article as of the date of publication. The volatile nature of the lean hog futures market adds complexity to price discovery and maintains ongoing market uncertainty.
[1] USDA Livestock Marketing Information Center (LMIC) [2] National Pork Board [3] Reuters [4] CME Group [5] Farm Futures
- Investing in the lean hog futures market requires careful analysis of supply-demand conditions, as market volatility is high due to factors such as hog slaughter estimates, USDA national base hog prices, and international demand from countries like China.
- Given the current downward trend in the lean hog futures market, some investors might consider exploring alternative avenues for finance, such as studying the dynamics of other agricultural commodities or live cattle futures, where prices have recently hit record highs.
