Lean hog futures might be showing a strong recovery, but the recent rally in prices shouldn’t be taken for granted, said Joe Vaclavik, of Standard Grain, speaking on U.S. Farm Report. “If you’re in the hog business, think about doing a little bit of marketing when the market’s up,” he advised
As for the long term, Roose argues that the market is still in a down trend that is being pressured by growing hog numbers and a lackluster export market.
Currently, though, October lean hog futures on the CME are trading more than $70/cwt after having been trapped mostly in the $60/cwt to $70/cwt range in past months. The recent rally to loftier prices is a marketing opportunity that shouldn’t be wasted, according to Don Roose, president of U.S. Commodities. “We think that we are in an overall supply-bearish market,” he said. “The demand’s been very stable domestically. Our exports have lagged 11 out of the last 12 months.”
Listen to their comments on the hog markets here:
Total pork exports this year through July are reported at 2.89 billion pounds versus 3.02 billion pounds for the same period last year, according to USDA.
Of market interest will be USDA’s Quarterly Hogs and Pigs report due out Friday, Sept. 25, providing the market with fresh numbers. In USDA’s last quarterly report in June, all hogs and pigs as of June 1 were tallied at 66.9 million head. That figure represents a 9% increase year-over-year, but just a small increase from the 66.6 million head reported in March 2015.
What should producers expect to see in Friday's hogs and pigs report? Roose said he anticipated that the report will reveal a supply situation in the U.S. that is not contracting, but rather mild expansion and higher weights.