By: Allan Bentley, USA Sales, Genesus Genetics

Finally a little good news!

The cash hog prices have more than doubled since the end of July. The backup of hogs have been eliminated and demand for the pork is on the rise.

As I write this, the cutout value is just under $90. That leaves plenty of margin for packers to continue to chase the hog prices higher. This is usually not the season for an increase, however, nothing about this year is normal. I usually like to advise taking advantage of December hogs when they approach $66 but I think we have some more upside at this time.

Demand from China is up and the disconnect between futures and cash hogs could be factored in pushing prices even higher. The old saying “Cash is King” seems to be the mantra in the hog markets.

As long as demand continues to increase it will push the markets and that is a great sign as to supply-driven markets.

Packers appear to be dragging their feet on offering any meaningful contracts. They still feel they are in the driver’s seat although that is changing as they are struggling to buy open market pigs at a lower cost as they normally can this time of year…but then again this is 2020 so who knows what could happen! Packers, or for that matter, feeder pig buyers like to negotiate in the 4th quarter as it gives them the upper hand with seasonal low prices. It is my belief that sellers will be in the driver seat this year.

Hang on tight as the ride is not over yet and hopefully, this wave continues in favor of the hog producers.

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This post was written by Genesus