The lean hog market delivered another pivotal week of activity, reflecting the dynamic nature of agricultural commodities. Below is an in-depth analysis of the latest market trends, metrics, and insights.
Cash Market Performance
The final cash price for lean hogs stood at $80.31 per cwt, with transactions ranging from $73.00 to $81.00 over 5,811 head. The Swine Pork Market Formula came in at $80.73, marking an increase of $0.09 from the prior session. These figures underscore stability in the cash market, with a slightly bullish tilt.
Slaughter Numbers
Daily slaughter estimates reached 486,000 head, bringing the week-to-date slaughter to 982,000 head. Projections for Week 4 estimate a total slaughter of 2.55 million head, including 185,000 scheduled for Saturday. Meanwhile, Week 5 is expected to slightly dip to 2.54 million head, with Saturday contributing 150,000 head. These steady processing numbers suggest robust demand from packers despite some pricing pressure.
CME Lean Hog Futures & Index
The CME Lean Index rose by $0.05 to $81.46, while the one-day plant price grew by $0.03 to $81.47. This slight uptick in the Lean Index signals market optimism, reflecting packer interest and strong retail demand.
Pork Carcass Cutout Value
The pork carcass cutout value decreased by $1.49 to $90.99, matching its five-day average. The range of recent values spanned from $90.39 to $92.31 across 381.20 loads. This decline emphasizes pricing challenges amid ample supply and fluctuating wholesale demand.
Basis Levels
February futures (HEG25) showed a basis of -$0.26, while April futures (HEJ25) came in at -$5.24. These competitive basis levels signal alignment between producers and processors on forward pricing strategies.
Key Futures Market Levels
February futures (HEG25) closed at $81.20, with resistance at $81.775 and support at $80.775. Similarly, April futures (HEJ25) settled at $86.70, with first resistance at $87.425 and support at $86.35. These resistance and support levels highlight traders’ price expectations and offer crucial guidance for upcoming strategies.
Volatility and Options Data
Volatility for February futures (HEG25) was reported at 16.07%. Notable options activity included 804 contracts traded for the JUNE 25 $100 PUT and 853 contracts for the APR 25 $96 CALL.
Key Insights
The market showcased steady processing, with high slaughter rates supporting overall production. However, pressure on pork cutout values may indicate an impending pricing recalibration to balance supply and demand. Futures pricing and volatility levels suggest cautious optimism among traders.
Looking Ahead
As we progress into Week 5 of 2025, traders should monitor further developments in pork carcass values, slaughter capacity, and packer demand. Additionally, basis movements and futures pricing will remain critical in aligning trading and hedging strategies.
