Pigs End the Week with Varied Transactions
Hog Futures Show Mixed but Positive Signs, Pork Prices Rise!
The hog futures market showed some variation on Friday, with June contracts dipping by $1.77 this week, but lean hog futures still displaying a bullish trend. The USDA's national average base hog negotiated price rose to $94.47 on Friday, an increase of $0.45.
The CME Lean Hog Index took a slight dip on May 7, settling at $90.07, down 9 cents. Despite this minor setback, managed money increased their net long position in lean hog futures, boosting it to 70,622 contracts as of May 6.
Friday afternoon's FOB plant pork cutout value rose significantly, up $3.33/cwt on a carcass basis, landing at $97.83. The belly was the only primal reporting a fall in prices. The USDA estimated hog slaughter for the week to be 2.437 million heads, down 49,000 heads from the previous week but still 56,877 heads over the same week in the previous year.
As the grilling season gets underway, May 25 Hogs closed at $90.375, down $0.275. June and July hogs, however, showed a more optimistic picture, with June contracts closing at $97.575 (up $0.400) and July contracts closing at $100.425 (a rise of $0.175).
Although there's been some ebb and flow in the market, the positive sentiment persists, largely due to the booming cattle and beef markets and the onset of the grilling season. With high beef prices encouraging consumer substitution to less expensive pork cuts and the expected demand surge during the grilling season, the hog market looks set for further growth. 🐖🥓 sauté!
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the our website Disclosure Policy here.
Insights:- Market Trend: The current hog futures market is bullish, with prices trending upwards and showing signs of further growth.- Cattle and Beef: Strong cattle and beef markets are conducive to hogs, as high beef prices drive consumers towards less expensive pork cuts.- Grilling Season: The commencement of outdoor grilling season is expected to boost demand for pork, further supporting future hog prices.- Consumer Demand: Seasonal consumer demand for pork typically increases during grilling seasons, particularly when beef prices are high, thus bolstering hog prices.
- The USDA's national average base hog negotiated price increased to $94.47 on Friday, driven partially by the booming cattle and beef markets.
- In scheduling their investments, investors may find interest in the bullish trend of lean hog futures, as the onset of the grilling season could lead to further growth in the hog market.
- Managed money increased their net long position in lean hog futures, boosting it to 70,622 contracts as of May 6, reflecting their positive outlook on future hog prices.
- Furthermore, the expected demand surge during the grilling season, due to consumers substituting less expensive pork cuts when beef prices are high, strengthens the bullish sentiment in the hog market.
