Lean Hog Futures Hit Contract Low as Cash Hogs and Cutout Slide

By Nathan Brooks

December lean hog futures printed another contract low on Wednesday, and the CME lean hog index slipped $0.76 to $64.99, as cash hog prices, cutout values and futures all weakened in the same week.

Thursday's projected CME index price fell harder still: down $1.06 at $63.93. The national direct five-day rolling average cash hog quote sits at $50.55. Producers are watching slaughter-ready hog values slide while the board compounds the pressure.

What did the cutout and midday trade show?

The USDA noon pork report put cutout value down $0.70 at $71.73, with bellies leading the losses. Midday movement reached 183.89 loads. Demand at the wholesale level isn't collapsing — but the price signal says buyers aren't chasing product either.

Technically, the near-term posture favors the bears. A price downtrend remains in place on the daily chart. One offset: the market is short-term oversold, basis the Relative Strength Index. That's a bounce setup, not a reversal signal.

Chart levels to track:

• Upside objective for bulls: a December close above resistance at $62.50
• Downside objective for bears: closes below technical support at $55.00
• First resistance: this week's high of $60.475, then $62.275
• First support: Wednesday's contract low of $57.10, then $56.00

How are exports holding up?

Here's the split story. USDA reported weekly pork export net sales of 37,300 tons — down 12% week over week but 5% above the four-week average. Mexico took roughly 45% of sales and 47% of shipments, reinforcing its weight across multiple US agricultural markets.

Beef tells a weaker tale. Net sales of 11,000 tons held unchanged from the prior week but ran 29% below the four-week average. China booked a net reduction of 600 tons. South Korea and Japan stayed the leading buyers. Beef shipments improved to 13,400 tons, giving a better immediate movement signal than the bookings suggested.

So pork is outperforming beef on the export side. That resilience hasn't stopped the cash slide, but it caps how bearish the demand picture can get.

What does this change for producers' margins?

With cash hogs at $50.55 on the five-day average and the index heading toward $63.93, hedgers face a market where technical selling keeps pressing December futures despite oversold readings. Feed costs add another variable: the projected ranges carry a sideways-lower bias across the complex.

Projected trading ranges for next week:

• December lean hog futures: $55.00 to $58.00, sideways-lower bias
• December soybean meal futures: $310.00 to $330.00, sideways-lower bias
• December corn futures: $4.30 to $5.60, sideways-lower bias

Cheaper corn and meal soften the feed side of the margin equation. Weaker hog prices pull the revenue side down at the same time. The net margin effect depends on how each leg moves from here.

For now, the bears own the trend. Bulls need a December close above $62.50 to change the posture; a break below $55.00 would extend it, and next week's sideways-lower bias suggests the market leans toward the second outcome.