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Lean Hogs Seeking Bottom

Summary:
Record production has lean hog futures searching for a bottom. Most actively traded December 2016 lean hog futures on the CME closed down 1.725 cents (3.6%) at 48.225 cents per pound, reaching a contract low of 48.075 cents per pound during Monday’s session. The October 2016 contract lost 0.600 cents (1.1%) on Monday to settle at 54.875 cents per pound, just above the contract low set on Thursday at 54.550 cents per pound. Hogs for February 2017 delivery also touched a new contract low of 52.550 cents per pound during Monday’s trading. The USDA slightly decreased their 2016 pork production estimates from 24,907 million pounds in August to 24,892 million pounds, according to the September WASDE report. Predictions for 2017 production remain unchanged. Live hog prices are expected to average around per cwt for 2016, and between –45 per cwt for 2017. The USDA estimates 2,359,000 hogs slaughtered for the week ending September 17, up 3.1% from the same time last year. Year to date slaughter for 2016 reached 81,374,000, a 0.6% increase from this time in 2015. Estimated pork production for the week is at 488.7 million pounds, a 13.3% increase from the prior week. Traders are anticipating updated US inventory numbers in the Quarterly Hogs & Pigs report to be released by the USDA on September 30 at 19:00 GMT.

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Record production has lean hog futures searching for a bottom.

Most actively traded December 2016 lean hog futures on the CME closed down 1.725 cents (3.6%) at 48.225 cents per pound, reaching a contract low of 48.075 cents per pound during Monday’s session.

The October 2016 contract lost 0.600 cents (1.1%) on Monday to settle at 54.875 cents per pound, just above the contract low set on Thursday at 54.550 cents per pound. Hogs for February 2017 delivery also touched a new contract low of 52.550 cents per pound during Monday’s trading.

The USDA slightly decreased their 2016 pork production estimates from 24,907 million pounds in August to 24,892 million pounds, according to the September WASDE report. Predictions for 2017 production remain unchanged. Live hog prices are expected to average around $47 per cwt for 2016, and between $42–45 per cwt for 2017.

The USDA estimates 2,359,000 hogs slaughtered for the week ending September 17, up 3.1% from the same time last year. Year to date slaughter for 2016 reached 81,374,000, a 0.6% increase from this time in 2015. Estimated pork production for the week is at 488.7 million pounds, a 13.3% increase from the prior week.

Traders are anticipating updated US inventory numbers in the Quarterly Hogs & Pigs report to be released by the USDA on September 30 at 19:00 GMT.

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Brent Lantzy
Writing is in my DNA. That is, I don’t know why I've always had the inclination to write, or why I’ve always been particularly good at communicating effectively through the written word. It is simply a part of who I am. Now, I’ve turned this skill into a business, lending my best writing efforts to professional projects requiring a unique, creative, and human touch.

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