Seasonal Analysis for December Hogs – 07/24/2023

Cash hogs have displayed a strong negative price seasonal from summer into autumn over the last 50 years. Increased slaughter hog supplies in the autumn has driven the negative price seasonal. Currently December lean hogs are trading $24 discount to the August hog contract. The discount reflects aggregate trader’s expectation that the seasonal price trend will recur in 2023.  

While cash lean hog values are likely to decline over the next six months, the current discount for December hogs appears to overshoot the average historical experience for the late summer –  Autumn of $92 compared to the latest trade of $76.  

The USDA’s June 2023 survey found hogs weighing less than 120 pounds totaled 39.7 million head vs 39.6 million head a year ago. USDA data does not suggest a major glut of hogs this fall which would weigh on lean hog futures values.