According to information from the U.S. Agriculture Department, the herd that breeds hogs was 1.2 percent smaller on December 1 of this year as compared to the same date in 2009. For the quarter ending November 30, sows produced average 9.89 pigs per litter, which marked a record rate.
"The breeding herd was smaller, but again we had more pigs per litter, so that's keeping our hog numbers fairly stable," Lawrence Kane, a market adviser at Stewart-Peterson Group in Yates City, Illinois, told Bloomberg. "It seems like every time we cut sows by 1 percent, the pigs per litter go up by 2 percent."
Prices for February-delivery hogs slipped 0.225 cents to 78.625 cents per pound shortly after 1 p.m. on the Chicago Mercantile Exchange. That 0.1 percent fall represents the first decline in seven trading sessions.
Thus far this year, hog futures are up 25 percent, which would mark the largest animal climb since 1978.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.