June lean hog futures remain in a three-month-old uptrend on the daily bar chart. Prices are near the recent 15-month highs and bulls are keeping their near-term technical advantage. Fundamentally, the US cash hog and wholesale pork markets continue to show strength. The CME latest cash hog index quote is $83.69. History suggests there’s a tendency for early-April hog and pork price weakness. 

Thursday afternoon’s quarterly USDA Hogs & Pigs report could impact cash and futures prices as it will provide the best estimate of hog supplies over the coming months. Of key interest is whether the slaughter reductions seen during the first two weeks March signaled a reduction in future hog supplies. Analysts expect the hogs and pigs report to show the U.S. hog herd was virtually the same size as year-ago at 74.136 million head as of March 1. The breeding herd is expected to be down 3.5%, while the market hog inventory is anticipated to be up 0.3% from last year. The winter pig crop is expected to be up 1.4% amid a 3.4% jump in pigs per litter. Spring and summer farrowing intentions are anticipated to be down 2.3% and 2.2%, respectively.

China’s hog herd still too big despite reductions

China’s hog herd will remain in surplus this year, despite new government targets to tame oversupply. Earlier this month, Beijing adjusted the national target for normal retention of breeding sows to 39 million head from 41 million and issued new regulations to control the country’s pig production capacity. But increasingly productive sows and a reluctance in hog farms to destock will keep herd size at high levels and prices low. Shanghai JC Intelligence Co. said the sow herd needs to decline to about 35 million head. It forecasts China’s 2024 pig production at 717 million head, down 10 million head (1.4%) from last year.

China’s sow herd, hog slaughter shrinks in February

China had 40.42 million sows at the end of February, down 0.6% from January and 6.9% less than last year, the ag ministry said. The number of pigs slaughtered in February fell 6.9% from last year to 21.04 million head, a 43.5% drop from January.

February US frozen meat stocks signal strong demand

USDA’s Cold Storage Report showed frozen pork stocks declined contra-seasonally during February, while beef inventories fell more than average. Beef inventories at the end of February totaled 442.8 million lbs., down 28.5 million lbs. from January. The five-year average was a 12.9-million-lb. decline during the month. Beef inventories dropped 58.0 million lbs. (11.6%) from year-ago and were 59.8 million lbs. (11.9%) less than the five-year average. Pork stocks dropped 6.8 million lbs. during February to 456.5 million lbs., whereas the five-year average was a 29.7-million-lb. increase for the month. Pork inventories fell 65.1 million lbs. (12.5%) from February 2023 and were 93.0 million lbs. (16.9%) less than the five-year average.

The next week’s likely high-low price trading ranges:

June lean hog futures--$98.625 to 105.00 and with a sideways-higher bias

May soybean meal futures--$329.30 to $350.00, and with a sideways bias

May corn futures--$4.20 to $4.40 and a sideways bias

Latest analytical daily charts lean hog, soybean meal and corn futures