Pork Cutout Value Surges as Hog Market Eyes Weekly Close

SolidityJester · 2025-12-26T06:12:50+00:00

The lean hog market showed mixed signals this week, with December contracts down slightly while later months gained. Cash prices declined, but the CME Lean Hog Index rose. Cutout values recovered, particularly in select segments, while traders reduced net long positions amid steady slaughter rates.

SolidityJester

2025-12-26 06:12:50

Abstract generation in progress

The lean hog complex displayed mixed signals this week as traders assessed competing pressures from supply data and price movement. December contracts slipped by a nickel, while later-dated months—February, April—posted stronger gains ranging from 55 to 85 cents per contract.

Market Pricing Shifts

USDA’s national base hog price settlement came in at $70.05 on Wednesday afternoon, reflecting a decline of $1.38 compared to Tuesday’s close. The CME Lean Hog Index offered a contrasting narrative, moving 5 cents higher to $81.89 as of December 8. This divergence between cash prices and index performance underscores the complexity in the current market structure.

Cutout Performance Rebounds

The pork cutout valuation posted a notable recovery, climbing 83 cents to reach $97.27 per cwt in the Wednesday afternoon USDA report. The rebound was selective, with picnic and ham primals showing strength while other primal cuts remained under pressure. This uneven bounce in the cutout suggests shifting demand dynamics across different pork segments.

Volume and Positioning Adjustments

Managed money traders reduced their net long exposure significantly, cutting 7,306 contracts from their positioning in lean hog futures and options during the week ending November 10. This repositioning brought the total managed money net long to 71,512 contracts, indicating cautious sentiment among speculative participants.

Slaughter Flow Tracking Production

Federally inspected hog slaughter reached 490,000 head on Wednesday, pushing the weekly total to 1.471 million head. This volume sits 28,000 head ahead of the previous week and 16,264 head above the comparable period last year, suggesting steady production flow despite seasonal considerations.

Futures Settlement Summary

December 2025 lean hogs closed at $82.450, down $0.050, while February 2026 contracts finished at $82.425, up $0.550. April delivery gained more substantially, settling at $87.375, up $0.850, as the forward curve reflected optimism about spring market fundamentals.

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