CME update: hog futures dive on economic concerns and larger-than-anticipated supply

US lean hog futures tumbled by the daily trading limit on Friday 26 June and ended much lower after the USDA reports that domestic supplies are above trade expectations.
calendar icon 29 June 2020
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The USDA quarterly hog inventory report, released after the markets closed on 25 June, showed a record-large 1 June supply of hogs that was up 5.2 percent from a year earlier. Analysts had expected a 3.7 percent increase.

"The market reacted to the report and the report came in a lot more bearish than most of us were expecting," said independent trader Dan Norcini.

A greater-than-expected supply of heavier hogs put pressure on the actively traded August contract, which traded limit-down during the session, as those animals will be coming to market in the near term, he said.

Chicago Mercantile Exchange (CME) July lean hogs dropped 1.650 cents to 45.275 cents per pound, while August ended down 3.200 cents at 48.125 cents per pound. July, August and October futures posted contract lows.

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