Admittedly, the hog market is a tough market to read at this time. Is it bullish or bearish? The action in the cash and in the Oct/Dec is bullish. But the Dec is moving away from recent highs and poised to challenge key support while trading at a substantial discount. The deferred contracts remain firm and near contract highs. So which is it…are we going higher or lower?

Most in the trade seem to believe the discount that Dec is trading at is justified. In other words, the hogs will show up, record large production this quarter will pressure cash and cutout. But exactly where are the hogs? Why is the kill at the end of Sep and early Oct running below last year? We should be harvesting nearly 4% more hogs and instead we’ve harvested 1% fewer than last year since Sep 1. I don’t have an answer. Monthly pork export data was positive despite continued tariffs in place by Mexico and China. Aug pork exports were up 4.5% from Aug of last year. Exports were down 5% to Mexico and down 21% to mainland China. Pork trade with Japan was up 7%, up 30% to S. Korea, up 8% to Canada, up 14% to Colombia, up 18% to Australia and up 155% to the Dominican Republic. THESE ARE SOLID EXPORT NUMBERS.

I’m convinced that ASF in China will continue to spread and eventually this will bring China to the EU and U.S. market for large amounts of pork

The above comments were received by me awhile ago! And I completely agree this market is hard to read!

Dewey