December 31, 2008

US quarterly hog data garnered mixed reviews

Market analysts and floor traders have mixed opinions regarding Chicago Mercantile Exchange lean hogs' possible response on Wednesday to Tuesday's (Dec 30) US government's quarterly hog report.

The figure for all hogs and pigs as of December 1 was put at 98 percent compared with analysts' average forecast of 99 percent and a range that was from 97.4-102 percent.

USDA pegged kept for breeding at 98 percent compared with the average of analysts' prediction of 96.7 percent and their projected range of 96-97.6 percent.

The USDA put hogs kept for marketing at 98 percent compared with the average estimate at 99.3 percent, ranging from 97.5-102.8 percent.

Some market watchers believe the data's inventory result implies fewer hogs in the coming months, which could be bullish for front-end contracts. However, some were disappointed in the 102 percent pigs per litter figure that, they believe, may exert bearish influence on some deferred month options.

By the same token, those who keyed in on the survey's hog weight breakdowns contend that the heavy-weight category outcomes may weigh on front months, while the lighter hog weight results might benefit bear-spreading into back contracts.