New Week in Hogs

On Friday hog prices slipped 2 to 65 cents past the Feb contract’s $1.22 drop. Feb hogs stayed at a net $2.05 through the week - and for a monthly gain of $2.47 with 4 trade days left in December. April was at its contract high on 12/05, and the other front months printed LoC highs on Thursday. USDA’s National Average Base Hog price for Friday afternoon was withheld for confidentiality, on Thursday afternoon it was quoted $79.08. The CME Lean Hog Index from 12/21 was down by 90 cents to $79.67. 

Commitment of Traders data showed managed money was closing longs and adding shorts during the week that ended 12/20. That reduced their net long by 3,730 contracts to 36,386. That was their weakest net long since mid-October. 

The quarterly Hogs and Pigs data release showed 73.119m head on December 1st. That was a 1.78% drop yr/yr and was down 556k head from the Sep NASS count. The average trade guess was looking for a 1.5% drop yr/yr. The market hogs were 1.98% lighter compared to the 1.6% drop expected. The breeding herd was higher by 0.47% compared to last year, with the trade leaning the wrong way ahead of the report and looking for additional contraction. 

Pork cutout futures settled lower on Friday, diverging with cash ahead of the H&P report.  USDA reported the National Pork Carcass Cutout value at $92.06, up by $3.30. Bellies were $15.35 higher. USDA estimated the week’s FI hog slaughter at 1.769m head through Saturday. That is down 823k head from last week, and down by 156k head form the same week last year. The YTD slaughter was marked at 122.486m head, a 2.9% lag from last year’s pace.  

Feb 23 Hogs  closed at $87.825, down $1.225,

Apr 23 Hogs  closed at $95.375, down $0.650

Feb 23 Pork Cutout  closed at $94.900, down $1.175,