August lean hog futures (HEQ25) saw a profit-taking setback late last week after hitting a contract high of $113.375 a hundredweight on June 17. The hog market bulls have faded, technically, as a price uptrend on the daily bar chart has at least temporarily been negated with Friday’s push to a new three-week low. That is one chart clue that a market top is in place.

Part of late last week’s selling pressure was due to a bearish USDA quarterly hogs and pigs report published Thursday. The U.S. inventory of all hogs and pigs on June 1 was a larger-than-expected 75.1 million head. This was up slightly from June 1, 2024, and up 1% from March 1, 2025. Breeding inventory, at 5.98 million head, was down slightly from last year, and down slightly from the previous quarter. Market hog inventory, at 69.2 million head, was up slightly from last year, and up 1% from last quarter. 

Cash Hog and Fresh Pork Fundamentals Remain Price-Friendly

Pork cutout value (KMZ25) and the CME Lean Hog Index are presently at their highest levels in almost three years, despite the relatively larger U.S. hog herd. That suggests strong consumer demand for pork at the meat counter. With beef prices at historically elevated levels and with consumer confidence declining, it is likely that we will see better consumer substitution demand for the less-expensive pork cuts over the pricier beef cuts. 

The latest CME Lean Hog Index is up another 48 cents to $111.89 as of June 25. The preliminary calculation puts the index up another 13 cents to $112.02 for Monday. Pork cutout value on Friday did decline by $2.19, to $117.46, but movement was solid at 333.46 loads. U.S. pork production is nearing a seasonal low. That has helped lift pork cutout value and cash hog prices as packers bid up for the smaller supplies. 

One worrisome element for the hog and fresh pork markets is that outdoor grilling season demand is currently peaking and will taper off after the Fourth of July holiday. Also, cash cattle prices appear to have topped out after a string of weekly record high average prices, which was halted in late June. Declining cash cattle (LEY00) and live cattle futures (LEQ25) prices in the near term would also be a bearish weight on the cash and lean hog futures markets.

Bacon Is the Ace in the Hole for the Hog Market Bulls

Starting in early July and lasting for several weeks is the bacon, lettuce and tomato (BLT) season, as home-grown tomatoes get ripe and plump, luring consumers to slap some bacon on the stove for some BLTs. Fresh bellies have been the primary driver of elevated pork cutout values as grocers have stepped up purchases in preparation for BLT-season demand.

Keep an Eye on Risk Appetite in the General Marketplace

S&P 500 ($SPX) and Nasdaq ($NASX) stock index futures hit record highs last week as trader and investor risk appetite surprisingly sprang back to life after the ceasefire agreement between Israel and Iran, which significantly de-escalated Middle East tensions. 

If risk appetite in the marketplace remains robust, the speculative commodity market bulls will be more aggressive on the long sides of the futures markets, including lean hogs. The speculators are the grease for the skids of up-trending bull markets in commodities. Conversely, a quick return of keener risk aversion in the general marketplace could mark the end of the latest bull market in lean hog futures.