CME update: hog futures gain as supply outlook wanes
US lean hog futures climbed on 28 April, supported by tight supplies and low inventory of available young hogs for producers as summer demand ramps up.
29 April 2021
3 minute read
By: Reuters reports that CME most-active June lean hogs added 2.450 cents to 109.125 cents per pound, with all contract months but June notching life-of-contract highs.
"Tighter supplies later on this summer should add a bit more premium, especially to these summer contracts," said Rich Nelson, chief strategist at Allendale Inc. "There's a seasonal drop in supply."
Hog slaughter has maintained a higher-than-expected rate through April, when pork production normally begins to slow, Nelson said.
Processors slaughtered 483,000 head on 28 April, in line with a week ago and 81% more than the same day a year ago, when pork processing ground to a halt due to COVID-19 related disruptions.
The CME's lean hog index, a two-day weighted average of cash prices, climbed to $107.39 per cwt, its highest since October 2014.
