Lean Hog Fundamental Support
The lean hogs market is now at the time where rising supply on a seasonal basis has a temporary period where it is offset by higher demand.
Procurement for October's National Pork Month generally is seen in the first three weeks of September. In 2014 the gain for cash hogs was 11.15 from the end of August to mid-September. In 2013 the jump was 7.88. In 2012 the seasonal rally was a little delayed. Cash hogs fell 7.65 during this exact timeframe. Once that rally did start it really picked up. From the low on the 12th cash hogs ran strong all the way up until October 24. We highly advise not to stand in the way of this market for speculative positions right now.
This week's hog kill will run a little different than last week due to the coming Labor Day holiday. Saturday's kill be a little lower by about 12,000 head but that will be made up for by early week increases. Next week, with almost zero for a Monday kill, is where the drop-off comes. In the past three years the week with Labor Day sees a smaller kill ranging from 210,000 -250,000 head. These numbers are already known by the trade and factored into the pricing.
On the supply end, today's 402,000 and tomorrow's estimated 104,000 head runs came in as expected. The week's kill at 2.214 million head is within the same grouping as the last two weeks.