APR-JUN LEAN HOGS SPREAD (HEJ27-HEM27) - WALSH PURE SPREADER

WALSH PURE SPREADER

Pure Hedge Division

RICH MORAN                                                                                                                        10/22/2026

APR-JUN LEAN HOGS SPREAD (HEJ27-HEM27)

There is good reason for the Lean Hog Market to be so low, but when will it turn around?  The “Sale” should eventually come to an end. 

Supply is up as the Hog slaughter numbers are currently as high as 1.5 million head a week.  Right now, demand is low on the retail level for pork products such as bacon and loins. Today’s lower poultry prices aren’t helping things for Lean Hogs either.  In the futures market, managed money is extremely short Lean Hogs, which is obviously putting downward pressure on the price as well.  When will it be time to try getting long?

For the last three months (late July to present), as the Lean Hogs market has been continuing its decline, the ARR-JUN Lean Hogs Spread (HEJ27-HEM27) has been going right along with it.  The two charts are very similar.  HEJ27-HEM27 has been below both the 14-day and 21-day moving averages for the far majority of this decline.

April Hogs (HEJ27) and June Hogs (HEM27) are only 2 months apart from each-other, but the current spread is $14.80 cents (72.45-87.25), making June’s pork 20% more expensive than April’s.  I know there are carrying costs, but that just seems excessive.

I believe that, if and when, the ARR-JUN Lean Hogs Spread (HEJ27-HEM27) can trade above, and settle above, both the 14-day and the 21-day moving averages, it might be worth putting on a long position in this spread with a relatively short stop somewhere below these moving averages.  It could be a nice way for anyone who has been waiting for the right way and time to put on a bullish position in the Hog market.  If the short positions being held by commodity funds decide it is time to exit these positions, that could hopefully help as well.

If we do trade above both the 14-day and the 21-day moving averages and you do get long the ARR-JUN Lean Hogs Spread (HEJ27-HEM27) :

Risk 2.000 or $800.00 Per Spread to make 4.000 or $1,600.00 Per Spread, plus fees and commissions.

If you have any thoughts/questions on this article, or any questions at all in regard to the commodities futures markets, please use this link  Sign Up Now

Rich Moran

Senior Commodities Broker

RMoran@walshtrading.com

Direct: (312)985-0298 

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involve substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.  All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.