CITIC Futures Agriculture Daily: Ample Slaughter Supply Weighs on Hog Prices
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CITIC Futures' agriculture daily covers oils, protein meals, corn, hogs, rubber, cotton, sugar, pulp, woodfree paper and logs. Hogs are the focus: larger planned October slaughter volumes, softer post-holiday demand and high weight inventories point to loose supply-demand, keeping prices weak as the cycle grinds along the bottom. Long-run herd capacity cuts are being offset by rising productivity, pushing the cycle's inflection toward end-2026. Hog prices should trade weak and sideways through the fourth quarter.
Elsewhere, the oils market is amply supplied nearby but rich in speculative themes, with El Nino-related production risks a medium-term focus; protein meals remain in a long-short standoff within a narrow range; corn futures rebounded even as spot prices stayed soft; rubber is sentiment-driven and tilting firmer; cotton production-cut expectations support seed-cotton prices; and sugar's strong-overseas, rangebound-domestic pattern should persist, with cotton likely to dip before recovering in Q4.
Strategies: hog producers can sell hedge into rallies, with on-exchange options focused on selling out-of-the-money calls; soybean meal — go long volatility via call and put purchases; rapeseed meal — sell rallies.
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