How long will hog market strength last?

Current price levels will last well beyond the summer months.


Dennis Smith, National Hog Farmer

Apr 05, 2021


In January, I suggested that hog futures were on the launch pad and ready to rocket upward. In early February, I had to admit that the rocket had not yet lifted off. But by early March, it was quite obvious that the rocket had left the launch pad. The only question was how much fuel was in the boosters? Well, we now know that the fuel boosters were full.


The Wall Street Journal reported April 1 that lean hog futures outperformed all other markets, including global stock indexes, bond ETF’s, currencies, and all other commodities. Lean hogs were number one, returning 43.79% during the first quarter. A nice development that was a long time coming in the wake of the disastrous 2020 as well as the losses incurred for several years prior to 2020. Now, the question is: How long will hogs remain in orbit?


As I focus my telescope and watch the hog market, here’s what I see. I see a market that has surpassed the highs from 2019, moving through these levels like a hot knife through butter. The 2019 high in the April hog contract was $82.00/cwt. On Friday, April 2021 hog contracts settled at $101.70/cwt. The 2019 high in the June hogs was $100.00/cwt. On Friday, June 2021 contracts settled at $106.80/cwt.


The April hog contract expires in less than two weeks. Focusing on the summer hogs, the highs established in the PEDV year of 2014 could very well be tested this year. These levels are $133.00-$134.00 in all three summer contracts. October hogs in 2014 peaked above $116.00 on July 3, with the December peaking at $105.80 in early July of that year. I’ve talked to some analysts that believe summer hog futures will trade to $140.00.


At this moment, in my opinion, the fall and winter 2022 hog contracts are the most undervalued...