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Lean Hog Cash And Futures Converging


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Packer profit margins, using prices off the daily comprehensive beef cutout sheet, are huge. If packers increase kill and beef supplies, it puts more beef in the store shelves, prices will drop. If they keep supplies tight, profit margins remain high. It is the basic definition of economics, maximization of satisfaction in the face of scarcity.


As of Wednesday, there are 3 days left to trade on the August 2021 CME Lean Hogs. Cash and futures are converging as they should. Fundamentals are moving August Lean Hogs. October 2021 Lean Hogs and the Lean Hogs into April 2022 are dominated by spread traders.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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