Hogs Surge on Short-Covering
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December Lean Hogs opened higher and dipped lower to the low at 53.525. The low was a test of the key level at 53.475 that was breached on Friday when Hogs made a new low for the down move at 53.175. Price then turned higher and rallied to the session high at 56.50. It consolidated near the high the rest of the session and settled near the high at 55.875. Volume was strong for the December and February contracts as traders rolled out of shorts in December to the deferred contracts as we are in the so-called Goldman roll period. The deferred contracts were weaker than up front as a result of the position switches in my opinion. December is still the lead contract for the moment but we will soon see the February contract take the reins as the contract with the most volume and therefore the lead contract. Cutout and cash prices remain weak as production is way ahead of demand in my opinion, as weights and slaughter are at high levels and consumer demand remains weaker than pork prices should warrant. We are moving into holiday ham buying period so maybe we can see some cash strength come back as consumers prepare for Thanksgiving with turkey and ham purchases for their family celebrations. This is a must for the producer as the low cash prices have put them under pressure. This could push back on production for next year as producers face a challenging environment as we move towards 2027. Producers are faced with rising costs and continued uncertainty about demand for pork. Feed prices are rising and non-feed costs have climbed and are expected to continue to remain elevated into 2027. The challenges are topped by the inability of pork to capture more of the consumer dollar. Exports have been stable as they continue to capture around 30% of the demand for pork. But, in the US, pork demand continues to languish as consumers have been willing to pay up for beef, keeping beef demand strong and eat chicken as its cheaper alternative. Meanwhile, pork sits on the sidelines, waiting for its opportunity. We’ll see!... The rally stalled just below resistance at 56.775. It also failed to test the gap from the Wednesday low at 57.10 to the Thursday high at 56.825. These are just some of the hurdles the December futures must leap over to get prices accelerating to the upside. A failure from settlement could see price re-test support at 53.475. Support then comes in at 51.80. A rally needs to overcome resistance at 56.775, 57.025, the gap and the declining 8-DMA now at 57.225 to move towards the next level of resistance at 58.25.
The Pork Cutout Index increased and is at 70.67 as of 11/06/2026.
The Lean Hog Index decreased and is at 61.57 as of 11/05/2026.
Estimated Slaughter for Monday is 496,000, which is above last week’s 492,000 and last year’s 491,501.
Trade Idea:
Buy the February 2027 Lean Hog 70 call
Sell the February 2027 Lean Hog 76 vs 70 put spread.
Cost to Entry - $1,600 credit plus commissions and fees.
Margin $760 per spread.
Maximum risk at option expiration : $800 plus trade costs and fees.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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