Hogs Close Mixed on Thursday

Lean hog futures closed mixed, with nearby contracts slightly higher and deferred contracts declining, while the USDA's national average base hog price fell $1.20 to $101.85. Weekly export sales increased 19.3% to 36,373 MT, driven by demand from China and Mexico, but export shipments hit a 19-week low at 24,077 MT; April pork exports totaled 582.9 million lbs, a three-year low for the month, and the pork cutout value rose $1.50 to $108.12.

Analysis

Lean hog futures exhibited mixed trading activity, with the June 2025 contract closing higher by $0.875 at $100.850, while deferred contracts such as July 2025 and August 2025 experienced modest declines of $0.225 and $0.450 respectively, settling at $104.800 and $107.050. This divergence occurred as the USDA's national average base hog negotiated price decreased by $1.20 to $101.85, although the CME Lean Hog Index for June 3rd registered an increase of $0.41 to $96.75. Demand signals presented a contrasting picture: weekly export sales for the week ending May 29th surged 19.3% to 36,373 metric tons, bolstered by significant purchases from China (12,700 MT) and Mexico (12,000 MT). Conversely, actual export shipments during the same period fell to a 19-week low of 24,077 MT. Further complicating the demand outlook, April's total pork exports, at 582.9 million pounds (carcass basis), marked a three-year low for the month and a 9.1% decline from March. On the supply side, federally inspected hog slaughter for the week ending Thursday totaled 1.903 million head, marginally down by 4,000 head compared to the same week last year. Despite weaker shipment volumes and historical export figures, the USDA’s FOB plant pork cutout value demonstrated strength, rising $1.50 to $108.12, even as rib and ham primals were reported lower.

Key Decisions for Investors

• Investors should closely monitor upcoming export shipment data to ascertain if the recent surge in sales, particularly from China and Mexico, translates into sustained physical offtake, given the dichotomy with the 19-week low in shipments and a 3-year low in April exports.
• The divergence between a rising pork cutout value and a declining national average base hog price, alongside mixed signals in the futures market, suggests traders should evaluate potential volatility and closely watch packer margins.
• The slight year-over-year decrease in hog slaughter, coupled with a firming pork cutout value, warrants attention to slaughter pace and wholesale price trends for indications of evolving supply-demand balance.