Pig outlook: Powerful rally in US lean hog futures continues

April hog futures have posted contract highs several days the past two weeks. Continuing strength in cash hog market fundamentals and a tight hog supply outlook continue to fuel the rally in futures. Wednesday the CME lean hog index rose to $86.62, the highest since October, and is expected to gain more in the near term. Wholesale pork prices have also extended recent gains. With US hog numbers down and consumer demand improving with the summer grilling season ahead, longer-term hog fundamentals look bullish.

USDA is expected to begin providing the initial phase of $750 million in livestock disaster assistance payments by March, Sen. John Hoeven (R-N.D.) announced. According to USDA, Phase 1 will: Use existing Livestock Forage Program (LFP) data. Require no or minimal additional paperwork from producers. Distribute at least half of the $750 million by the end of March.

“Our livestock producers have been hit by drought and other natural disasters over the last year, which has really taken a toll on their operations,” said Hoeven. “That’s why we worked to set-aside $750 million in disaster assistance specifically to help our ranchers weather the challenges of 2021. We’ve been pressing USDA to get these funds out as soon as possible, and USDA now expects this aid to begin flowing to producers by March. This is good news, and we’ll continue working to ensure the assistance is provided as effectively and efficiently as possible.”

More aid ahead. The $750 million for livestock producers is part of $10 billion in disaster aid, with an additional $9.25 billion in disaster funding to extend WHIP+ to aid producers who suffered losses due to droughts, hurricanes, wildfires, floods and other qualifying disasters in calendar years 2020 and 2021. USDA announced it will provide that assistance in a two-phase approach as well, beginning this spring.

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

April lean hog futures–$100.00 to $110.00, and with a higher bias

March soybean meal futures–$430.00 to $475.00, and with a higher bias

March corn futures–$6.10 1/4 to $6.50, and a sideways-higher bias

The Pig Site

Tags: disaster, USDA, pork prices, hog futures, hog market, livestock producers