Hogs Make New Low for Down Move
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December Lean Hogs opened higher and made the session high at 69.30. Price broke down to its early low and then worked back to the upper end of its range before a late breakdown took price to its low at 68.175. This is a new low for its recent down move and settlement was near the low at 68.40. The cash market is the main driver of the weakness in futures as weak cutouts continue to plague hogs, keeping pressure on cash prices. The market continues to shake off its recent Hogs and Pigs report which was somewhat bullish based off of analyst estimates. Funds continue to short the futures market, building a record position to the downside. This could lead to a short-covering rally if the cutout can recover and reverse its own downtrend. Production is pretty much even with last year(just under), but the cutout has crashed as demand seems to be an issue for pork. Even with pork prices well below beef prices, pork hasn’t been able to capture the consumer as they are still leaning towards beef products and the commodity known as chicken which continues to see strong consumption patterns. Pork has been the equivalent to the middle child and must do more to attract attention or price can continue lower, in my opinion. We’ll see!... Price broke down and settled below support at 68.75. A failure from settlement could see price test support at 67.80. Support then comes in at 66.55. If price can hold settlement, it could test resistance at 69.90. Resistance then comes in at 71.325.
The Pork Cutout Index ticked lower and is at 87.33 as of 09/25/2026.
The Lean Hog Index decreased and is at 81.76 as of 09/24/2026.
Estimated Slaughter for Monday is 491,000, which is above last week’s 465,000 and last year’s 488,209.
Trade Idea:
Buy the February 2027 Lean Hog 74 call
Sell the February 2027 Lean Hog 80 vs 74 put spread.
Cost to Entry - $1,250 credit plus commissions and fees.
Margin $1,075 per spread.
Maximum risk at option expiration : $1,150 plus trade costs and fees.
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Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
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