Hogs Can’t Hold Early Rally and Breakdown

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July Lean Hogs is now the lead contract as its volume has exceeded the volume of the June contract. It opened higher and rallied to the session high at 105.00. The rally took price past resistance at 104.35 but it couldn’t sustain the enthusiasm and it turned lower and broke down the rest of the session to the low at 102.675. It settled just above the low at 102.75. The breakdown took price down to last week’s lows on the July chart. The opening rally looked to be about hope. Hope that the agreement reached with China during the President’s trip of $17 Billion for US farm goods purchases annually would lead to higher exports for pork. The realization that China is continuing to cut back on hog production due to excess supply and weak demand took the wind out of the sails for the rally, in my opinion. We also had weaker exports last weak with Mexico cutting back in a large way as the worries over the Pseudorabies virus lingers. They have stopped importing breeding pigs and pork offal due to the virus and the weaker exports from the last report could also have been a result of the virus. They have cut back on imports of variety meats but have continued to take in pork muscle cuts as Mexico is being cautious. The virus doesn’t affect humans and the US maintains the US pork supply is safe. Testing is ongoing in the affected area and the US has lifted pig movement restrictions within the 5-mile surveillance zone surrounding the small commercial pig herd in Iowa with confirmed detection of pseudorabies. All premises in this zone completed round one testing with no further detections. “All animals from both the Iowa index herd and the non-commercial source herd in Texas have been depopulated and properly disposed of,” APHIS reports. “All herds with direct exposure to these positive sites have been identified, and epidemiological investigations and diagnostic testing of these sites are ongoing. Cleaning and disinfection of the Iowa premises were completed on May 12.”

No additional commercial sites have been identified as having direct exposure to the commercial site in Iowa or the source herd in Texas, APHIS says. Officials say the 2-mile surveillance zone around the index herd remains active, and movement restrictions within that zone continue. Premises within the 2-mile surveillance zone, along with all exposed herds, must complete a second round of testing 30 to 60 days after the affected site is cleaned and disinfected. This testing is scheduled to occur between June 12 and July 11. Until negative results from this second testing round are confirmed, movement restrictions for exposed herds and all swine premises within the 2-mile zone will remain in place, APHIS says. The affected site remains under quarantine pending a 30-day fallow period and completion of the second round of testing for all exposed herds and all swine premises in the 2-mile surveillance zone. APHIS states - there may be limited, short-term impacts on exports of U.S. swine, swine genetics and certain animal products.  The USDA is working with trading partners to clarify and mitigate these impacts. The restrictions on breeding pigs’ purchases by Mexico and the cutback on imports, if it lingers could lead to an increase in pork supply in a period where supply normally declines. This could put a crimp in advances in the cutout down the road and trader worries likely fueled some selling as the cutout has struggled lately and if the struggles continue it could keep cash prices lower than expected going forward. We’ll see!... A failure from settlement could see price test support at 101.975. Support then comes in at the rising 50-DMA now at 101.65 and the rising 21-DMA now at 101.15. If price can hold settlement, it could re-test resistance at 104.35. Resistance then comes in at 106.85.

The Pork Cutout Index ticked lower and is at 96.45 as of 05/15/2026. 

The Lean Hog Index down ticked and is at 90.46 as of 05/14/2026.

Estimated Slaughter for Monday is 460,000, which is below last week’s 462,000 and last year’s 481,329.

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