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 Futures Contract Specifications|
|Contract Size||40,000 pounds (˜18 metric tons)|
|Price Quotation||Cents per pound|
|Trading Hours||Monday 9:05 a.m. Central Time/CT-Opening. At 4:00 p.m. CT on Monday- Thursday, the markets halt and restart at 8:00 a.m. CT on the next morning. Friday 1:55 p.m. CT-Close|
|Minimum Price Fluctuation||$.00025 per pound ($10 per contract)|
|Product Code||CME Globex: HE|
|CME ClearPort: LN|
|Listed Contracts||February (G), April (J), May (K), June (M), July (N), August (Q), October (V) & December (Z)|
|Settlement Method||Financially Settled|
|Last Trade Date||10th business day of the contract month, 12:00 p.m.|
|Trade At Marker Or Trade At Settlement Rules||Trading at settlement is available for first 2 listed futures contract months, a calendar spread between the first and second contract month, and are subject to the existing TAS rules. The Last Trade Date for CME Livestock TAS products will be the second to last business day in the month prior to the named contract month.
Trading in all CME Livestock TAS products will be 9:05-13:00 Chicago time on Mondays or on the Tuesdays that follow a Monday holiday, and Tuesday through Friday 8:00-13:00, Chicago time.
TAS products will trade a total of four ticks above and below the settlement price in ticks of the corresponding futures contract (0.00025), off of a “Base Price” of 0 to create a differential (plus or minus 4 ticks) versus settlement in the underlying product on a 1 to 1 basis. A trade done at the Base Price of 0 will correspond to a “traditional” TAS trade which will clear exactly at the final settlement price of the day.
Note: No May contract or calendar spread with the May expiration as a leg will have TAS in Lean Hog futures.
|Settlement Procedures||Lean Hog Futures Settlement Procedures|
|Exchange Rules||These contracts are listed with, and subject to, the rules and regulations of CME.|
|Source: CME Group|
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 October 2015
Recent Posts on Lean Hogs
- Beyond the Spotlight: September 07, 2021 (Oil, Hogs, Milk) (9/7/2021) - Beyond the Spotlight is a weekly video released on Mondays that spotlights two or three markets that may become trading opportunities for the week ahead. This enables you as a subscriber of the Trade Spotlight advisory service to look ahead with us, while potentially creating additional trading opportunities for yourself. The week’s video linked below… Read more.
- Trade Spotlight: Futures – Weekly Summary: Hogs, Yen (8/6/2021) - Trailed the stop loss lower on the Lean Hogs contract to lock in profit. Stop triggered on the Japanese Yen contract to take profit.
- Trade Spotlight: Futures – Weekly Summary: Yen, Hogs (7/30/2021) - Trailed the stop loss higher to reduce the risk on the Japanese Yen contract. Shorted the Lean Hogs contract on the breakout.