Lean Hog Futures Update
December Hogs Futures have rallied sharply since making a low last summer. The reported heavy (over 120 pounds) hog census data on September 1 missed the mark to the low side based on lighter than expected slaughter data since early September. In a previous post we published a study suggesting a high of $81 for the December lean contract and that still appears a reasonable target.
Lean hogs are closely associated with the pork carcass value published by USDA daily. The accompanying table displays the December lean futures and hog carcass value on the last day of trading over the previous seven years compared to current data. The December live contract could gain a few dollars on the carcass value through contract expiration, but an advance in the Carcass Cutout Value will be needed to push the December live contract well into the $80s.
| Lean Hog Futures Vs Cash Carcass Value $/Cwt. Last Day Trading | |||||
| Date | December | Carcass | Basis | Ratio | Year |
| 12/14/17 | $64 | $77 | -$13 | 83% | 2017 |
| 12/14/18 | $55 | $72 | -$17 | 77% | 2018 |
| 12/13/19 | $60 | $82 | -$21 | 74% | 2019 |
| 12/14/2020 | $65 | $77 | -$12 | 84% | 2020 |
| 12/16/2021 | $72 | $91 | -$19 | 79% | 2021 |
| 12/16/2022 | $82 | $87 | -$6 | 94% | 2022 |
| 12/14/23 | $67 | $84 | -$16 | 80% | 2023 |
| 10/18/2024 | $78 | $97 | -$19 | 81% | 2024 Current |
Based on the CME December lean hog contract and cash carcass value