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December Lean Hogs opened higher and rallied to the session high at 69.00. It reversed course and broke down to the low at 67.825. It consolidated the rest of the session and settled at 68.325. Hogs bounced back after making a new low for the December contract since it took over as the lead contract on Friday at 67.75. Traders were enthused that the cutout staged a strong morning rally after the index made a new low for its recent downward trek on Friday. The cutout gave back some of its gain on the afternoon report but still had a solid gain for the start of the week. The Lean Hog Index remains weak however, so we need to see the higher cutout stabilize cash prices for the producer. There are still large short positions in the futures market so any change in the sentiment for the cash market will likely pressure funds to cover some of their shorts. Exports continue to be steady and we could see demand grow for our pork overseas but we need a better demand response from the US consumer for pork. Supplies will continue to grow as both weights and slaughter have increased which will lead to greater production going forward. Consumer demand is basically in the same area it’s been in for the past couple of years. The USDA expects US consumers to eat 49.6 pounds of pork for 2026 which is just slightly higher than consumption of pork for 2025(49.3). Meanwhile production is expected to reach 28 billion pounds for 2026. This is why exports are important for pork. With the strong production of pork, exports will play a greater role going forward. The trade agreement with China could lead to better exports to that country but the US has been working to increase exports to other countries to lessen the impact China has on exports. We’ll see!... The open took price above resistance at 68.75. The pullback took price to support at 67.80. A failure from settlement could see price test the low from Friday at 67.325. Support then comes in at 66.55. If price can hold settlement, it could re-test resistance at 68.75. Resistance then comes in at the 8 and 13-DMA which are both at 69.225 and flattening. A rally past here could see at test of resistance at 69.90.
The Pork Cutout Index decreased and is at 82.23 as of 10/09/2026.
The Lean Hog Index decreased and is at 77.61 as of 10/08/2026.
Estimated Slaughter for Monday is 498,000, which is above last week’s 493,000 and last year’s 479,970.
Trade Idea:
Buy the February 2027 Lean Hog 74 call
Sell the February 2027 Lean Hog 80 vs 74 put spread.
Cost to Entry - $1,250 credit plus commissions and fees.
Margin $1,075 per spread.
Maximum risk at option expiration : $1,150 plus trade costs and fees.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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