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