Higher Output Drags on Lean Hog Futures

After rallying for an entire week, hog futures are down for a second day in a row on signs of ample domestic supply of porkHog futures had been teetering near record highs first made this past summer.

Last week the USDA reported commercial pork output ending last month to be nearly 3% more than the prior year, and USDA data shows meat-packers in the specific Southern Minnesota/Iowa region processing 11% more animals than the year before.  Wholesale pork prices are hovering just under 0.83c per pound.

Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, stated today regarding the current lean hog futures situation, “Hog futures declined in today’s trading as Friday’s quarterly hog supply report is expected to be somewhat bearish.  Producers have been sending large amounts of hogs to slaughter as herds were larger than previously expected.”

Hog futures have renewed their uptrend only recently.  I am trying to get long this market, but have suspected hog futures will have to pull-back before taking a position.

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