Looking to the Futures
Lean Hog Futures Continue to Find Lower Lows
December lean hog futures (/HEZ26) continue to fall further, hitting a low of 58.225 cents per pound midday on Wednesday the 28th. Lean hog futures have not hit this level since September of 2020.
Hog futures are typically affected by seasonality to some extent. Supply is typically increased at the end of the year as animals born around the mid-June-August farrowing period reach market weight in early winter. However, headwinds may be stronger this year, as persistent cash-market weakness and sluggish wholesale pork demand increase pressure on December futures.
The USDA's Livestock, Dairy, and Poultry Outlook for October of 2026 shows Pork production in 2026 is forecast at 27.6 billion pounds, up 0.2 percent over 2025, and production in 2027 is expected to be 27.8 billion pounds, up 0.7 percent higher than the forecast for 2026. Through 2027, the United States will contend with sluggish growth in demand for imported U.S. pork by Mexico, slowing the expected growth rate of total U.S pork exports.
Mexico remains the largest purchaser of U.S. exports, accounting for 38 percent of shipments by year-to-date volume through August 2026. This year growth of U.S exports to Mexico has been slower than in the past, due to increased competition from Canada and Brazil.
U.S. pork exports totaled about 516 million pounds in August, nearly 5 percent below August 2025. Shipments to Mexico fell by 11 percent as they received 200 million pounds of that total, down from 225 million a year earlier.
Wholesale pork prices remained under pressure Tuesday, with the USDA pork cutout falling $0.71 to $73.09/cwt. Pork bellies led the decline, falling $3.19 to $76.42, while loins dropped $2.28 and butts fell $1.75. Strength in picnics, ribs and hams partially offset those losses. The weakness in the cutout, particularly bellies, adds to the challenging backdrop for lean-hog futures.
Technicals
Today we have a 20-year monthly chart of Lean Hog futures (/HE), running from 2006 to the current December contract of 2026. Currently the December contracts are trading at 58.85 after a sharp recent decline. One thing I did want to highlight with the longer timeframe is the seasonality of Lean Hog futures, we can notice sharp price increases followed by rapid price declines all throughout this chart. Even still the most recent candle seems to be out of character as the futures chase the cash market. This leaves the four moving averages at the higher levels. The 9-, 20-, 50- and 200-day simple moving averages are sitting at 88.706, 91.24, 87.11, and 81.15, respectively. Implied volatility has moved to 35.41 percent. The MACD has crossed beneath the signal line to -2.5186.
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Major economic reports, trading events, and news items that could potentially impact specific futures markets:
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