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, 2021||88.35|
|March 25, 2022||125.85|
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.
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.
This post was written by Genesus