USDA outlook for the Hog Market – 10/14/2020

The USDA provided quarterly Pork production and demand  estimates for the next year in the October WAOB report. We have expressed the aggregate supply estimates as per capita domestic Pork supply for the period October 2020  through September 2021 and averaged the current futures price quotes for the same period 

The accompanying scatter study uses the per capita Pork supply as a barometer of deliverable hog  prices. Live hog futures  quotes are presently well above the regression line. Traders may be counting on the barometer  shifting to the left because farmers cut farrowings or pork export demand is more robust than USDA is assuming. At any rate deliverable hog futures quotes are not in line with the USDA pork supply/usage forecast based on historical experience.