LEXINGTON, Ky. — The lean hog futures market continues to show strength as technical patterns and seasonal fundamentals favor bullish momentum. Traders and analysts point to a classic bull flag formation on the June lean hog futures chart, alongside rising cattle prices and tightening supply expectations, as drivers of the positive sentiment.
As of May 13, the June contract is trading at roughly an $8 premium to the CME Lean Hog Index, which is priced at $90.77. This signals market expectations for further gains in cash hog prices over the next month, supported by seasonal reductions in slaughter numbers.
Technical Edge for Bulls
The near-term technical posture clearly favors the bulls. The emergence of a bull flag pattern, often a precursor to continued upward momentum, suggests that June hog futures could test new highs in the coming weeks. The projected trading range for next week is pegged at $96.675 to $101.975, with analysts assigning a sideways-to-higher bias as sentiment builds.
Demand Outlook Strengthened by USDA Export Data
Demand fundamentals remain healthy, according to the latest USDA export sales report. Net sales for 2025 reached 24,600 metric tons (MT)—a 2% increase over the prior week and 16% above the 4-week average. The top buyers included Mexico, Japan, Canada, Colombia, and Chile.
Exports also held firm, totaling 26,500 MT, up 4% week-over-week. Mexico continued to dominate export destinations, receiving 12,000 MT, followed by Japan, South Korea, Colombia, and Canada.
Global Trade Context: JBS Sees Robust Gains
JBS, the world’s largest meatpacker, delivered a 78% year-over-year surge in Q1 net profits—reaching 2.92 billion Brazilian reais ($521 million). The Brazilian and U.S. poultry and pork segments powered this growth, with CEO Gilberto Tomazoni downplaying the impact of ongoing tariff pressures, calling them “insignificant.”
Financial Highlights:
Net revenue: 114.1 billion reais (+28% YoY, -2.2% QoQ)
EBITDA: 8.92 billion reais (above analyst forecasts)
Profit growth from Q4: +21.2%
The company achieved record EBITDA margins in Brazil’s Seara division and in its U.S.-based Pilgrim’s Pride operation. However, rising cattle costs and an operating loss in North America’s beef segment—587.2 million reais—highlight cost-side concerns.
JBS’s trade exposure remains broad, with China accounting for 23% of its $4.9 billion in quarterly exports. The company is preparing for a major milestone: listing on the New York Stock Exchange, expected next month pending shareholder approval.
China’s Pork Import Decline Adds Complexity
The global pork market faces fresh challenges as China’s meat imports fell to 513,000 MT in April, a 6.4% decrease from March and 5.7% lower than April 2024. For the first four months of 2025, total imports stand at 2.16 million MT, down 2.9% year-over-year.
Key Drivers of Decline:
- Economic slowdown reducing household protein demand
- Ample domestic pork supply after strategic stockpiling
- Trade disruptions stemming from U.S.-China tensions
- Yuan depreciation increasing the cost of imports
- Shift in consumer behavior toward cheaper, locally produced meat
While some expect modest pork import rebounds due to potential domestic shortfalls, the overall trend remains bearish. Exporters like the U.S., Brazil, and Australia are reassessing their positions in the Chinese market.
Market Implications and Forward Look
Despite headwinds from China, the domestic lean hog futures market appears resilient. The strong technical setup, favorable USDA export data, and seasonal supply tightening all point to continued strength in futures pricing.
Next week’s projected futures price ranges and outlook:
- June Lean Hog Futures: $96.675 to $101.975 – Sideways to higher bias
- July Soybean Meal Futures: $291.20 to $308.10 – Sideways to higher bias
- July Corn Futures: $4.36 ½ to $4.70 – Sideways to higher bias
With bullish charts and supportive fundamental trends, lean hog futures may continue their climb, even as global trade dynamics add a layer of uncertainty. Market participants will closely monitor export flows and consumer behavior in key regions like China to gauge the sustainability of the current rally.
