The June lean hog futures surged to a six-week high on Wednesday, signaling a strong bullish trend. Prices are currently on a steep upward trajectory on the daily charts, with bulls holding near-term technical control. However, fresh pork cutout values are still under pressure, dropping by $1.70 to $94.08, as all cuts, except for butts, saw losses. Traders are closely watching the USDA’s upcoming cold storage report to assess pork demand in March, which could offer insights into future market trends.
As of April 22, the CME Lean Hog Index rose by 67 cents, reaching $86.75. Lean hog bulls are optimistic that the CME cash index has bottomed out and will continue to rise as slaughter levels decrease, and pork production reaches its seasonal low around mid-summer.
US Pork Export Sales: Weakening Demand and Price Concerns
The USDA reported weak pork export sales for the week, with net sales for 2025 dropping to 5,800 metric tons (MT), a new marketing-year low. This figure is down 72% from the previous week and 82% from the prior four-week average. Sales to major importers like Japan, Mexico, South Korea, and Canada were still notable, but exports to China fell sharply by 12,000 MT, contributing to the decline in overall export sales. This decline in export activity is causing concern in the market, as weaker global demand could further pressure prices.
Tyson, Clemens, Triumph Settle Pork Price-Fixing Lawsuit for $64 Million
In legal news, Tyson Foods, Clemens Foods, and Triumph Foods have agreed to a $64 million settlement in a pork price-fixing lawsuit filed by food service providers. Tyson will pay the largest share, $50 million, while Clemens will contribute $10 million, and Triumph $4 million. Despite the settlement, all three companies deny wrongdoing. Triumph, in particular, has defended its actions, emphasizing its increased supply during the period in question and suggesting it would have prevailed at trial. The plaintiffs are still pursuing claims against Agri Stats, a consulting firm accused of aiding in the coordination of pricing through the exchange of non-public data.
US Livestock Slaughter Trends and Pork Production Insights
In the USDA’s 2024 summary, total red meat production, including beef, veal, pork, and lamb, rose 1% compared to the previous year, totaling 55 billion pounds. Commercial hog slaughter also increased by 1%, reaching 130 million head. The average live weight of hogs was up by 1 pound from the previous year, now at 288 pounds. Interestingly, the number of slaughter plants in operation has increased, with 1,089 plants involved in red meat slaughtering, compared to 1,012 last year.
China’s Pork Market: Import Decline and Output Growth
China’s pork imports decreased by 1.2% in March, totaling 90,000 MT, although imports for the first quarter of 2024 rose by 7.5% compared to the same period last year. At the same time, China’s pork production saw a modest increase of 1.2% in Q1, with 16.02 million metric tons produced. Despite this increase, the sector faces challenges from oversupply and slow demand, which has led to price pressures and lower profits. The Chinese government has responded by lowering its national breeding sow retention target, aiming to curb oversupply.
Price Outlook for Next Week
For the upcoming week, analysts predict the following high-low price trading ranges:
June Lean Hog Futures: $97.00 to $103.00, with a sideways-higher bias.
July Soybean Meal Futures: $289.70 to $308.10, with a sideways bias.
July Corn Futures: $4.70 to $4.97 1/2, with a sideways bias.
Conclusion
Lean hog futures remain in bullish territory, supported by expectations of a tightening market as summer approaches. However, weak pork demand, both domestically and globally, could hinder price growth. Legal challenges in the pork industry, such as the ongoing price-fixing lawsuit, also add a layer of uncertainty. Nonetheless, the overall outlook for lean hog futures is cautiously optimistic, with traders eyeing upcoming reports for clearer guidance.
