Most categories in Friday's USDA data were higher than expected. The U.S. hog inventory as of September 1, at 68.360 million head, is surprisingly 188,000 head higher than a year-ago. U.S. hog numbers were expected by traders to be around 1 million head fewer than year-ago.

The larger hog numbers were due to a higher-than-expected summer pig crop and a continued rise in the number of pigs per litter.

The bigger-than-expected market hog inventory suggests slaughter will run around one per cent above year-ago through the first quarter of next year.

Based on the pre-report estimates, traders were anticipating U.S. hog slaughter to be one per cent below year-ago levels through that timeframe. U.S. hog farrowing intentions for fall and winter showed producers plan to expand their hog herds.