Pig outlook: Lean hog futures bulls fade this week, need to step up

USDA makes additional moves to improve meat processing capacity and global food prices continue to rise.

“The latest rise of the FFPI was largely driven by higher prices of most cereals and vegetable oils,” FAO says. On the production front, FAO comments that while it still expects a record-setting global cereal crop of 2.8 billion MT in 2021, that would still fall short of anticipated consumption, drawing down inventories.

FAO raised its global wheat crop estimate by 7.2 MMT to 776.7 MMT, which would be in line with the 2020 crop. It cited higher yield estimates for some areas of Eastern Europe like Ukraine and strong production prospects in Australia.

Chart showing the trading trajectory of December lean hog futures
Bulls have the overall near-term technical advantage as prices post strong rebound from September low. However, they need to show fresh power soon to keep their edge

© Jim Wyckoff

Many pigs in an outdoor run
Market researchers estimate that there is one more week of strength in the US cash hog index
Small-scale butchery
The USDA is making moves to strengthen meat processing capacity and facilitate small- and medium-scale butchers
Feed corn being emptied into a bin
The FAO's food price index has hit a 10-year high in September
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