Supply and demand in 10 offer little in the way of favorable factors:
On the supply side, large-scale hog producers did not meet their sales plan in 9, so the animals not sold as planned will be carried over for sale in 10. Spring restocking also indicates that the number of hogs currently available for sale remains large. Industry participants generally believe that hog supply in 10 may increase month on month. As for the weight of hogs sold, large hogs held back from sale earlier and large hogs from secondary fattening may continue to be released onto the market.
On the demand side, 10 is a lull within the peak demand season in the fourth quarter. Demand for the two holidays has ended, while the cured-meat season has yet to begin. In addition, temperatures are not yet very low, so they cannot significantly stimulate consumption. Overall, end-market consumption lacks strong support, and pork demand is highly likely to decline month on month.
Of course, after hog prices fall to a low level, some secondary-fattening operators may become more interested in restocking to position themselves for the sales windows in 12 and 1 next year. A short-term increase in restocking demand for secondary fattening may temporarily support hog prices.
Overall, hog supply in 10 may increase month on month, and hog prices may fluctuate downward. In 11, as market demand increases and producers hold hogs back to add weight, hog prices may improve slightly. In 12, particularly around the Winter Solstice, sales and demand may rise markedly again, and hog prices could see a moderate increase.
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