Deliverable Hog Prices in The First Quarter of 2021 – 11/14/2020

The accompanying scatter study displays January/March deliverable hog prices as a function of the domestic pork supply per capita in the same quarter. The data released in the November 2020 WAOB report suggest a per capita pork supply of 16.8 pounds which is slightly smaller than a year ago. February futures are currently trading on the high side of the regression line, but still within the standard deviation of the forecast.

Futures traders may believe pork production will fall short of USDA’s forecast or winter  pork export demand will be stronger than USDA anticipates. The Chinese are always a wild card in the pork complex market. At any rate hog futures prices could be under pressure if the domestic winter pork supply matches USDA’s November 2020 forecast. 

We have included a graph of the raw pork production data to aid prospective.