Supply Speculation a Downer for Hog Futures

Hog futures pulled back for the third time in a week and a half on the outlook of cooler weather allowing hogs to gain weight before taken to slaughter, ultimately adding to pork supplies.  Hog futures are currently higher for the day and testing last month’s high.

In the next week to a week-and-a-half, it is forecasted to be cooler than normal from the Northern Great Plains, Midwest, and Southeast.  Cooler temperatures translate into hogs “eating more” which will reverse the USDA finding of last week of hogs weights dropping a full percent when temperatures and humidity were high.
Demand may also be shifting from higher cattle prices to pork as well as favorable weather helping to put weight back on the hogs,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current hog futures situation.

The overall trend for hog futures has been up, but in the last few weeks it appeared hogs might have been at a crossroads.  I have been light on my feet with hog futures lately, but am seeing the the overall uptrend as the direction to trade.


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