The North American hog market appears ready to move higher, but Paul Marchand says the data has not yet given futures traders enough reason to chase a rally.
Marchand, senior risk management analyst with h@ms Marketing Services in Headingley, Man., said in the May 19 Hog Market Outlook that Canadian markets were closed for the Victoria Day long weekend, but U.S. hog futures traded as usual. Lean hog futures moved through a fairly wide range, especially in the June-to-October contracts, but finished only slightly higher and close to Friday’s levels.
“The market wants to move higher,” the h@ms report noted, adding that a move higher would fit normal seasonal patterns if it develops soon. However, Marchand said broader uncertainty in the global economy continues to keep more optimistic investors cautious.
One major issue is global conflict. Marchand said the ongoing war involving Iran has nothing directly to do with hog and pork supply and demand, but it adds enough macroeconomic uncertainty to slow speculative buying.
Managed money traders added to short positions last week, a sign that funds still see some potential for price pressure. The report said managed money now holds its largest short position since August 2024. If those traders eventually exit those shorts, the buying activity could provide support to the market.
For now, the supply picture remains adequate. Marchand said hog weights are coming down and weekly slaughter has softened, but the sharper seasonal decline in both normally does not develop until early June.
Another important signal is pork produced per animal, which h@ms watches as a proxy for packer yield. While production slipped slightly from the previous week, it remained notably higher than the same marketing week last year. The report said pork production per animal was 3.1 pounds higher than last year, suggesting barn and packing efficiencies continue to offset any talk of tighter hog supply.
That matters because the market has spent months discussing potential supply tightness tied to earlier PRRS detections. Marchand said that shortage has still not shown up in the data.
“In sum, futures have no reason to rally at present, and the seasonal supports to cash and cutout could be a couple weeks away yet,” the h@ms report stated.
The Manitoba Agriculture hog report offers another look at the cash side of the market. For the week ending May 8, Manitoba’s all-in weighted average hog carcass price stood at $247.10 per 100 kilograms, down 0.3 per cent from the previous week and slightly below the same week in 2025. The four-week average, however, remained stronger than last year at $247.57 compared with $243.08.
The Index 100 hog price followed a similar pattern. It reached $234.33 per 100 kilograms for the week ending May 8, also down 0.3 per cent from the previous week and 0.5 per cent below the same week last year. The four-week average sat above last year’s level.
Manitoba processing numbers remained firm. Major processors handled 123,050 hogs for the week ending May 8, up 1.5 per cent from the previous week and 2.1 per cent above the same week in 2025. Average hog weights continued to ease lower, sitting at 106.18 kilograms.
Together, the two reports show a market waiting for confirmation. Futures traders see seasonal potential, but supplies remain adequate. Manitoba prices remain relatively steady, but not yet explosive.
For producers, the message is practical: watch weights, slaughter levels, cutout values and fund activity closely. The summer rally may still come, but the market has not yet proven it. •
— By Harry Siemens