Lean Hog Market Shows Mixed Signals Amid Price Volatility

The lean hog futures market displayed divergent momentum across different contract months on Friday, reflecting typical seasonal trading patterns. December contracts faced headwinds with a 7-cent decline, while forward-looking months demonstrated strength, with February and April positions gaining 30 to 50 cents respectively.

Price Movement and Market Indicators

The CME Lean Hog Index climbed 41 cents to $82.57 on December 10, signaling underlying strength in the hog head pricing complex. This positive momentum stood in contrast to USDA’s national base price assessment, which retreated $1.11 to settle at $70.93 during Friday’s morning session. The divergence between these benchmarks suggests selective buying interest across different market segments.

Processing values shifted southward, with USDA’s pork carcass cutout dropping 30 cents to $98.54 per hundredweight. However, primal cuts demonstrated resilience, as loin, butt, and belly components all recorded gains, indicating strength in key protein segments despite overall cutout pressure.

Supply Dynamics and Year-Over-Year Comparison

USDA data showed federally inspected slaughter reaching 494,000 head on Thursday, pushing the week-to-date volume to 1.965 million head. This cumulative figure exceeded the prior week by 22,000 head and surpassed the equivalent week from the previous year by 37,121 head, pointing to elevated processing activity and potentially tighter hog head availability entering the holiday season.

Forward Contract Positioning

December 25 hogs settled at $83.325, marking a modest $0.075 pullback. February 26 contracts moved higher at $84.525, gaining $0.350, while April 26 futures advanced to $89.600, up $0.375, reflecting the typical seasonal curve steepness during this period of the year.