Hog futures continues its retreat down for the ninth out of eleven trading sessions as news is learned that reportedly domestic hog producers are poised for a minimum of six months of operating in the red. Hog futures are down $0.60 per cwt today currently trading at $83.375 per pound at the Chicago Mercantile Exchange.
“Breakeven” may be the best hope for hog producers in the second quarter next year if a University of Illinois professor is correct on his assessment. He believes animal prices per head will fall from an $8 profit to a $19 loss taking into consideration feed prices follow the expectations of the current futures prices curve – and this doesn’t take into account any interruption in the world economy following the Brexit situation.
“If Brexit does slow world income growth, that could be negative for global sales of pork and other US agricultural products,” said Chris Hurt, professor at the University of Illinois, sharing his fundamental assessment of the hog futures market. Hurt added, “Brexit gives our biggest global pork competitor a sizable and immediate price advantage.”
Hog futures trend has only recently turned “down” from the $90+ highs only two weeks ago. I would expect some type of bounce in the hog futures market in the next week, but if Professor Hurt is correct on his assessment, we may see a longer-term downtrend ahead.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.