Each year, 100 million hogs are brought to slaughter, a number only possible because of the movement to intensive, rather than traditional, pig farming. Because pork is one of the most widely consumed meats, the demand for pork is always strong and growing. Lean hog is the most common source for pork meat in the U.S., but the country that continuously ranks at the top for total consumption of pork is, without a doubt, China.
|Lean Hog Contract Specifications|
|Contract Size||40,000 pounds (~18 Metric Tons)|
|Product Description||Hog (barrow and gilt) carcasses|
|Pricing Unit||Cents per pound|
|$.00025 per pound ($10 per contract)|
|Contract Months/Symbols||February, April, May, June, July, August, October, December|
|Trading Hours||CME Globex: Mon–Fri 9:05am–1:55pm CT
Daily trading halts 4:00pm-5:00pm CT
|Open Outcry: Mon–Fri 9:05am–1:00pm CT|
|Daily Price Limit||$.03 per pound above or below the previous day’s settlement price; none for expiring contract in last 2 trading days|
|Settlement Procedure||Daily Livestock Settlement Procedure
Final Lean Hogs Futures Settlement Procedure
|Last Trade Date||10th business day of the contract month, 12:00 pm|
|Position Limits||Non-Spot: 4,150 contracts in any contract month
Spot: 950 contracts
All months combined: n/a
|Product Ticker Symbol||CME Globex (Electronic): HE (LN=Clearing)
Open Outcry (Trading Floor): LH
|Exchange Rules||These contracts are listed with, and subject to, the rules and regulations of CME.|
Lean Hog Facts
Hogs have a relatively short gestation period of about 3.5 months with the typical litter bearing 9 piglets. Therefore, hogs are bred twice a year continuously in order to ensure a constant wave of production. After about a month, the piglets are weaned from their mothers and fed a special diet to produce a quick weight gain. Hogs can gain up to 3 pounds every time they feed. When hogs are around 6 months old and reach a weight of over 250 pounds they are ready to be butchered. Each matured hog can yield around 190 lbs. of meat suitable for consumption.
China is responsible for nearly half of all pork production worldwide, however, the United States is the leader for pork exports. Japan was the world’s largest importer of pork in 2011.
Lean hog futures can allow traders to address price risk among those involved in the trade of lean hogs and to assess supply and demand of lean hogs for both the current and future outlook.
Last updated May 2013
Lean Hog News Articles
- Cattle futures slip as demand forecast to wane (6/3/2013) - Decreased demand pulled down cattle futures on the first trading session of June after the agricultural commodity notched its record-high price last month, according to Bloomberg.
- Cattle futures climb as cookout season dawns (5/2/2013) - The Thursday trading session saw cattle futures surging toward their top climb in about seven days amid indications that demand for U.S. beef was on the rise due to more comfortable weather prompting grilling, according to Bloomberg. The first three days of this week had meat packers process 369,000 cattle during the first three days,... Read More.
- Hog futures drop as demand drops (3/11/2013) - Reduced demand pulled down hog futures on Monday as the livestock reversed three consecutive trade sessions of gains, according to Bloomberg. Stronger weather systems during the past 180 days have warded away many consumers from grocery stores, such as heavy snowfall in Boston and Hurricane Sandy along the Eastern Seaboard in October of last year,... Read More.
- Hog futures slide as Russia, China demand slows (2/21/2013) - Indications about reduced worldwide demand tugged down hog futures on Thursday as the livestock was heading toward its lengthiest bearish run in about 16 months, according to Bloomberg. The U.S. Meat Export Federation said that China, which is the globe's third largest buyer of pork products generated in the U.S., demanded paperwork demonstrating exports were... Read More.
- Strong supplies drag down hog futures (2/19/2013) - Indications about plentiful supplies in the U.S. pulled down hog futures on Tuesday, according to Bloomberg. Demand for the commodity weakened, which also pulled down its price during the Tuesday trade session as cattle futures also lost value. Last week saw meatpackers process 0.3 percent more hogs as compared to the week prior, which amounted... Read More.
- Drought poised to impact cattle futures (2/14/2013) - Cattle futures are likely to be impacted by offshoots of the harsh summer of 2012 in regions of the U.S., which prompted many acres of pasture land to dry, according to Bloomberg. Byproducts of the worst drought in more than 70 years drew down populations of herds of cattle to their smallest numbers since the... Read More.
- Hog futures slide as demand forecast to drop (2/12/2013) - Conjecture about reduced U.S. demand pulled down hog futures to their lowest price in about four weeks on Tuesday, according to Bloomberg. The threat of inclement weather in New York City and regions northeast of the metropolis is fueling the conjecture as it could endure as many as three additional inches of snow. From Friday... Read More.
- Cattle futures rise amid concerns for supply dearth (1/28/2013) - The prospect of reduced supplies prompted cattle futures to mark their sharpest gains in about 180 days on Monday, according to Bloomberg. Feedlots in the U.S. purchased 0.5 percent less cattle last month as compared to one year prior, the U.S. Department of Agriculture stated late last week. Analysts, anticipating increases, were taken aback by... Read More.
- Hog futures forecast to slip as pig population drives to record highs (5/1/2012) - The four-year rally of lean hog futures is projected to wane next year due to a flourishing population of pigs in the U.S. and production from China bouncing back, according to Bloomberg. This year will see farmers in the U.S. raise more than 117 million pigs, considered to be the most in more than 50... Read More.
- Cattle futures climb despite Labor Day’s passage (9/14/2011) - Demand for U.S. beef pushed up cattle futures for the second straight day on Wednesday, according to Bloomberg. Midday trading had the livestock commodity up 1.1 percent, pushing it to two-week high prices of $1.8375 per pound, according to information provided by the U.S. Agriculture Department. One broker predicted meat prices will resume climbing for... Read More.
Lean Hog Blog Posts
- Beyond the “Spotlight” (7/8/2013) - The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
- Beyond the “Spotlight” (3/18/2013) - The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
- Technically Speaking: Markets You Should Be Watching Right Now! (12/18/2012) - This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on December 17, 2012. February LEAN HOG SELLING at 85.40 on a LIMIT order (GTC) …last trade 85.15 Risk will be above the recent high of 86.40, …($400.00) OBJ will be the recent low and near 50% retracement level of 83.40... Read More.
- Market Spotlight: Soybean Meal (10/16/2012) - Soybean Meal is produced through processing and separating Soybeans into oil and meal components. By weight, Soybean Meal accounts for about 35% of the weight of raw Soybeans (at 13% moisture). If the Soybeans are of particularly good quality, then the processor can get more meal weight by including more hulls in the meal while still meeting the 48% protein minimum.
- Technically Speaking: Markets You Should Be Watching Right Now! (9/4/2012) - This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on September 04, 2012. October / December LEAN HOG seasonal spread I am looking to get long the front month Lean Hog market (October) while shorting the back month (December). We have seen quite a bit of selling over the past... Read More.
- Market Spotlight: Lean Hogs (8/16/2012) - Hogs are generally bred twice a year in a continuous cycle designed to provide a steady flow of production. The gestation period for hogs is 3-1/2 months and the average litter size is 9 pigs. The pigs are weaned at 3-4 weeks of age.