Currently most of the trade is locked in a “bearish all meats” mode.
We can certainly agree in the cattle end for the next couple of weeks but would suggest this break on the hogs is a little overdone. The sharp drop in lean hog futures today soon after the open illustrates that point.
August and futures were down the limit at one point today. December fell 2.05 before rebounding. While we will agree with some concerns over demand this is not a wholesale price panic. Today’s pork and cash hog losses came to 48 and 69 cents.
One bullish issue for hogs that must be addressed is corn. New highs for this uptrend will help trim weights a little more on market ready numbers for the summer. The real change comes with farrowing numbers and therefore the spring/early summer outlook for 2016.
We call Friday’s monthly supply/demand report as bullish. They added 125 million to their 2015 pork output forecast but more than offset that with a 150 increase for exports. The net result is the amount of pork left for U.S. consumers went down from a 7.5% increase to now a 7.1% increase.