Pork Value Demand Outlook Lifts Hog Futures

With the speculation that demand from expensive beef will shift to less expensive pork, hog futures catapulted to $82CWT after meeting last September’s low of $78.50.  This spike in hog futures is the highest in eight weeks and may be a reversal-day for pork prices.

USDA data indicates packing plants slaughtering 1.6% more hogs than this time last year.  At the same time, the disparity of pork prices versus beef prices is about $1.17, but maybe not for long.  A major food company is predicting pork prices to rise this year due to an anticipated reduced beef supply.

With beef prices rising slight, hogs look relatively cheap. Heading into the spring and summer grilling season this should benefit pork prices,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current hog futures situation.

Hog futures trend is still clearly down, but today’s reversal in pork prices should be considered a pull-back opportunity to look for short positions once again.  Tomorrow’s USDA Crop Report should affect hog futures as well.

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