Chart of the Day - February Lean Hogs

Chart of the Day

The information and opinions expressed below are based on my analysis of price behavior and chart activity

Tuesday, December 16, 2025

February Lean Hogs – Will Hogs remain strong or fail into the end of the year?

If you like this article and would like to receive more information on the commodity markets from Walsh Trading, please use the link to join our email list -Click here 

February Lean Hogs (Daily) 

February Lean Hogs settled at 84.775 on Tuesday, up 0.925 from Monday.  This marks the highest close for the contract since October 22^nd.  Monday’s trade saw the prices spike lower, testing the 5-, 10-, 50- and 200-day moving averages, with a low on the day of 82.400 before closing 1.450 off the low at 83.850.  It’s interesting to me that the past 3 weeks have all seen tests of the 10-day moving average (red) and the short-term trend has continued higher.  The 5- and 10-day averages (blue/red, 83.950/ 82.915, today’s values, respectively) have been in a bullish configuration since the day before Thanksgiving, Nov 26^th.   Last week was the first time that Hogs had closed above the 200-day moving average (purple, 83.596) since late October, with Thursday and Friday’s trade.  The 50-day average is still declining (green, 82.552) but that average seems to have become support now.  The 100-day (grey, 85.388) still has a slight declination to it and may offer some resistance or profit-taking, if/when it gets tested.  Open Interest and trade volume have been declining recently, as you may notice in the mid-subgraph.  In part, that may be due to the approaching “holiday trade” and also partly due to data uncertainty that’s left over from the US Govt shutdown.  I have a suspicion that many traders are “data-driven” and without somewhat accurate Commitment of Traders or Export data, they’re willing to sit out for a bit.  It’s my understanding that they’ll be caught up and putting out current data in the first full week of the new year.  Stochastics (bottom sub-graph) are indicating an overbought condition, currently. Looking back over the chart view, it appears to me that the Hog market has no problem with extended periods of overbought/oversold. 

I’ve put the Fibonacci retracement levels, drawn from the September high to the November low, on the chart.  Last Friday’s and today’s trade saw that level tested and it’s just above today’s settlement, at 84.901.  It appears to my eye that the market paused a bit at the 23% and 38% levels since the recent rally began, but eventually breaking through those levels within about 3-4 days.  I would expect that same type of pause at the 50% mark, before seeing another push to the 62% level at/near 86.732. 

This view of the daily chart tells me that while prices have been recovering over the past 3-4 weeks, it’s basically been flat, if the 200-day moving average is a reasonable gauge. 

Overall, I do like this market from the long side. And if the further out months are any guide, prices should continue higher, as April Hogs are at 89.700, with June at 101.775 and July trading at 102.55.  All substantially higher than the current February price.

Aggressive and well-margined traders may do well to consider long futures positions in the February Lean Hogs.  Perhaps an entry on a pullback toward the 5-day moving average at 84.000 would work.  With a protective GTC Sell-Stop below Monday’s low, which was 82.400.  An 82.000 stop from the 84.000 entry level would result in a risk of $800 before your commissions/fees.  A profit target at 90.000 would result in a gain of $2,400 per contract, before your commissions/fees.

Less aggressive traders may do well to consider a Bullish Call Spread in the options.  Buy the Feb 85 Call and Sell the Feb 90 Call.  Those options expire in 59 days.  At today’s closing prices, that can be done for 1.650 or $660 out of pocket, before your commissions/fees.  I would suggest placing a GTC order at 2x what you paid for the spread.  I would also suggest exiting that spread if it declines in value to ½ of what you paid for it. 

If Spreads aren’t your thing, the 85.000 Call settled at 2.425 today, or $970 per option, before your commission/fees.  Place GTC order to exit the option at 7.275, or 3x what you paid for the Call.  I’m not a fan of stop orders in most option markets, but I would only risk ½ of what you paid for the option. 

February Lean Hogs (Weekly)

The weekly view of Lean Hogs show the February contract shows me that this market has been in an uptrend for its life.  The 8 weeks of bearish trade that we saw from late-September until mid-November was just a 62% retracement, as you might notice from the Fibonacci retracement on the chart.  That’s drawn from the April low to the September high, a bit different that the one I have drawn on the daily chart above.  Prices have rebounded and are back up over the 50-week average (green, 82.927)  The 5-and 10-week moving averages (blue/red, 82.055/82.06, respectively) are thisclose to making a bullish crossover on the weekly chart, as they’re currently just decimal points apart.  Unless the price falls immediately and dramatically over the rest of the week, I would expect that bullish weekly signal to be in place in the next day or two. All of the weekly moving average values that I mentioned are below the market and should offer some support.  I wouldn’t expect it to zoom straight up, but I would expect pork prices to remain firm and likely set new contract highs once we get into 2026.  There are the December Quarterly Hog & Pig and Monthly Cold Storage reports that come out next Tuesday, the 23^rd.  With recent inventory reports indicating that the US Hog herd has been shrinking, I see no reason for the December reports to be bearish.  As we get closer to report day, contact me for estimates on production.

Seasonally, Hog prices tend to be choppy, with a bias to head lower until the middle of January.  You can view Barchart’s seasonal data here.  However, in my opinion the Lean Hogs seasonal patterns have not been in place, with the market diverging several times through the past year and shouldn’t be followed blindly.

If you like what you’ve read here and would like to see more like this from Walsh Trading, please Click here and sign up for our daily futures market email. 

Jefferson Fosse  Walsh Trading

Direct 312 957 8248 Toll Free 800 556 9411

jfosse@walshtrading.com   www.walshtrading.com

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.