Hog futures are a type of commodity futures contract that allows investors to speculate on the future price of pork. Lean hog futures are the most popular type of hog futures, and are traded on the Chicago Mercantile Exchange (CME).
Lean hog futures contracts are available for trading in three different contract months: February, April, and June. The contract prices are quoted in U.S. dollars and cents per hundredweight (cwt), and each contract is for the delivery of 40,000 lbs. (18,143 kg) of lean hogs.
The price of pork is determined by a number of factors, including the price of corn (hog feed), weather conditions, the strength of the U.S. dollar, and international demand.
Hog futures are a risky investment, but can be profitable for traders who correctly anticipate changes in the price of pork. Lean hog futures are also used by pork producers as a hedging tool to protect against future price declines.
Pork production in the United States is concentrated in the Midwest, with Iowa, Illinois, and Minnesota accounting for the majority of U.S. hog production. The U.S. pork industry is export-oriented, and exports account for approximately 20% of U.S. pork production.
China is the largest importer of U.S. pork, and the country's demand for pork has been a major driver of hog prices in recent years. Other important export markets for U.S. pork include Mexico, Canada, Japan, and South Korea.
Lean hog futures are a risky investment, but can be profitable for traders who correctly anticipate changes in the price of pork.