Lean Hog Futures

In its September food price trend survey released on the 15th, the Ministry of Agriculture, Forestry and Fisheries reported that the national average retail price of pork loin reached 293 yen per 100 grams, marking a record high since the survey began in August 2003. Eggs, for a mixed-size pack of 10, came in at 309 yen, matching the record highs logged in March, May, and June of this year. The rise in pork prices stems from higher import prices driven by the yen's depreciation and growing global demand, which has strengthened appetite for domestically produced pork. For eggs, the spread of avian influenza last year was a factor, along with increased demand as fast-food chains and others launched moon-viewing seasonal products that use eggs to represent the moon.

Petch Nantawisai, Chief Executive Officer of Thaifoods Group Public Company Limited, or TFG, disclosed that pork and chicken prices are likely to remain at high levels continuously through around mid-2027, because demand for meat consumption continues to recover while market output cannot keep pace with demand. As a result, prices have not fallen as the market had expected after the Chinese New Year festival and may rise further at certain periods. Small operators continue to face pressure from commodity input costs, oil prices, and disease outbreaks, with some groups forced to cut production capacity. Meanwhile, large operators have an advantage in farm management and disease control, allowing them to maintain production levels and gradually increase capacity. On business strategy, TFG is pressing ahead with expanding its retail business, Thaifoods Fresh Market, and expects to have a total of approximately 860 to 870 branches by the end of 2026, with a target of opening another 200 to 250 branches in 2027. At the same time, exports continue to grow, especially to the Japanese, European, and United Kingdom markets, with Japan now entering its high season. Export products cover fresh frozen chicken and processed cooked chicken. In Vietnam, the company is the country's third-largest pork producer and is in the process of investing further in broiler breeder farms. On production costs, the company locked in soybean meal prices in advance starting in late 2025, helping overall costs remain at a low level. This year it has invested in expanding back-end infrastructure, including pork and chicken slaughterhouses as well as breeder farms, and expects to clearly begin seeing the benefits from 2027 onward.

Managed money reduced its net short position in lean hog futures by 1,242 contracts during the week of August 4, bringing the total net short to 9,642 contracts, according to the CFTC Commitments of Traders report. Lean hog futures posted steady to 50-cent gains on Friday, though the August contract lost $3.35 for the week. The USDA’s national base hog price fell 63 cents to $97.67, while the CME Lean Hog Index slipped 29 cents to $96.66. The pork carcass cutout value rose $2.24 to $101.50, with all primals higher, and estimated weekly hog slaughter reached 2.281 million head, up 17,000 from the prior week and nearly 50,000 above the same week last year.

Lean hog futures posted gains of 45 cents to $1.20 in most contracts on Tuesday. The national average base hog negotiated price was reported at $80.14, up $1.00 from the day prior, while the CME Lean Hog Index reached $80.76 on January 10, up 33 cents. USDA’s FOB plant pork cutout value edged a penny higher to $90.21 per cwt, with the loin primal up $1.78. Federally inspected hog slaughter for Tuesday was 477,000 head, bringing the week-to-date total to 963,000 head, which is 29,000 head larger than last week and 143,121 head above the same week last year.

Lean hog futures closed higher on Tuesday, with gains ranging from 17 to 42 cents. Modest new buying interest was noted as open interest rose by 1,629 contracts. USDA’s national base hog price was reported at $100.22 on Tuesday afternoon, up $1.33 from the prior day, while the CME Lean Hog Index increased 51 cents to $96.16 as of July 17. The pork carcass cutout value gained $1.72 to $104.82, led by higher belly, rib, and ham primals. Federally inspected hog slaughter for Tuesday was estimated at 479,000 head, bringing the week-to-date total to 910,000 head after a revision to Monday, which is 11,000 head below the prior week and 14,487 head below the same week last year.

Lean hog futures closed $1 to $1.37 higher on Friday, with the October contract up $1.000 to $81.950, following the USDA's Hogs and Pigs report. The report showed June 1 hog inventory at 73.664 million head, down 0.04% from last year, with breeding stock down 1.16% and market hog inventory up just 0.05%, well below trade estimates of a 1.1% increase. Farrowing intentions for June through August are seen at 2.9 million head, down 2.19% from last year. The national base hog price was $93.44, down $1.85 from the prior day, while the pork carcass cutout value rose 15 cents to $95.37. Managed money increased its net short position in lean hog futures and options by 4,601 contracts to 25,560 as of June 23.