Lean Hog Futures Reach New Highs

Last Friday U.S. Lean Hog Futures reached new contract highs from May to May. A sign that future traders have now realized the huge decrease in pork production is a reality.

June 2022 Lean Futures

October 28, 202188.35
March 25, 2022125.85

The relentless increase of June Lean Hog Futures of 38¢ lb. ($80 per head) is fascinating since all the pigs that will go to market in June were already born by the end of October. The so-called “smart money” didn’t do the Farmer Arithmetic that there were less hogs (year to date -7%). We believe October-December lean hog futures have significant upside with the supply-demand scenario shaping up.

Other Observations

U.S. Cull Sow Prices have jumped over 40¢ lb. in the last few weeks. Last week 500-549 sows were averaging 94.19¢ lb. (75.00-100.49). A 525 lb. sow @ 94.19¢ lb. = $494. Certainly, you can buy a gilt for replacement!

Official U.S. February sow slaughter was 239,200; February a year ago 241,200. Not much change. The latest weekly sow slaughter was 61,929. A relatively high number considering size of breeding herd and continued high sow mortality. We see these numbers as an indication that the U.S. breeding herd inventory is not expanding.

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This post was written by Genesus