The lean hog market has been undervalued for quite some time, Ted Seifried, vice president and chief market strategist of Zaner Ag Hedge, said on AgDay TV.
“We had a lot of weight upfront, but now we finally chewed through that literally and figuratively,” Seifried said. “Now you have the front month hogs leading the way to the upside. Your bull spreading in a market that for a very long time had been really very bear spread.”
With fewer hogs out there than what the industry expected a few months ago, compounded by strong domestic demand and an inflationary environment, he said it looks like “we have a long-term low” in the hog market.
“I don’t think we’re going to have to see hogs break down below that hundred-mark again anytime soon unless there’s some sort of black swan event,” Seifried said. “There’s a word that I will not say out there, but short of something like that happening, I really think hogs will continue to stay supported and continue to have some upside potential.”
Export demand is strong too, he noted. In addition, disease pressures loom.
“We have a lot of disease issues that are pressuring the herd as well. And my guys that are looking to replace their hogs after going to market are really having a hard time doing so,” he told AgDay’s Clinton Griffiths.
He’s optimistic that there is more upside potential for the hog market.
“I like the way that we’re finally doing this from the front end rather than the back end. And you like the looks of the charts for a longer-term low for now,” Seifried said.
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