Pig outlook: Lean hog futures remain in strong price uptrend

US cold snap roils the agriculture sector but potential consumer spending signals a rebound.

 

by Jim Wyckoff, The Pig Site

19 February 2021

 

The pig traders’ perspective

 

April lean hog futures this week hit a new contract high amid a strong price uptrend still in place on the daily bar chart—suggesting the path of least resistance for futures prices will remain sideways to higher in the near term. However, some analysts think the $8-plus premium the lead futures contract holds to the cash index mean futures are too far out in front.

 

While the CME Lean Hog Index is trending higher, the national direct cash hog bids dropped this week and the five-year average is $3.30 down in the cash index. If the cash hog market shows signs of softening, April hog futures would be a risk of greater losses. Seasonally, the cash index firms around $10 into mid-summer.

 

June and July hogs currently hold around $16 premiums to the cash index, while August hogs have more than a $14.50 premium. Part of that stronger-than-normal cash optimism is tied to expectations Chinese demand could be stronger than previously thought amid an uptick in African swine fever and other hog diseases during winter. Average hog weights in the Iowa/southern Minnesota market fell another 1.1 lbs to 287.2 lbs the week ending 13 February, which is 1.9 lbs above year-ago levels. Cold temperatures have limited animal weight gains and processing.

 

The next week’s likely high-low price trading ranges ...

 

Latest US Department of Agriculture (USDA) reports, and other US news

 

US economic recovery is broadening, suggesting better pork demand ...

 

Brutal cold in central US impacting livestock marketing, health ...

 

US food companies warn they may pass rising commodity prices on to consumers ...

 

Global pork industry news

 

German pork prices rising ...

 

COVID-19 outbreak forces Alberta pork processing plant to close ...

 

more, including chart, links

https://www.thepigsite.com/articles/pig-outlook-lean-hog-futures-remain-in-strong-price-uptrend