Guide to Trading and Spread Betting on Lean Hogs
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Trading and Spread Betting on Lean Hogs

Trading and Spread Betting on Lean Hogs


Where Can You Trade Lean Hogs?


This is not a popular market with investors but IG Index still offer a hogs futures market.

Other firms may offer prices but that the time of writing we can’t find many that offer the market.

Cattle Futures Trading


Note that you can trade Cattle Futures with: Again, other firms may also offer cattle futures markets.



Lean Hogs and Cattle Trading News


Date Trading Update
19-Oct-17 [12:09pm] Updated Lean Hogs and Live Cattle COT Reports

The latest Commitments of Traders Report (COT) for Lean Hogs and Live Cattle have been released by the CFTC, see our Lean Hogs and Live Cattle COT reports below.

We have also updated our Commodities COT Summary Report.

Update by Gordon Childs, Editor, CleanFinancial

» For more see Commodities Trading News & Analysis.

Readers please note:


Lean Hogs Commitments of Traders Report - 10 Oct 2017 (i)


Futures Only Positions, CME , Code 54642, (Contracts of 40,000lbs) (i)

Reporting Firms (i) Non-Reportable Positions (i)
Non-Commercial (i)
Commercial (i) Total Reportable (i)
 
Commitments (i) Open (i) Interest Commitments
Long (i) Short (i) Spreads (i) Long Short Long Short Long Short
93,116 51,125 41,141 98,156 118,401 232,413 210,667 251,522 19,109 40,855
 
Changes from 3 Oct 2017 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
1,428 -1,928 -3,142 -5,064 -1,362 -6,778 -6,432 -5,955 823 477
 
Percent of Open Interest for Each Category of Trader (i)
Long Short Spreads Long Short Long Short   Long Short
37.0% 20.3% 16.4% 39.0% 47.1% 92.4% 83.8%   7.6% 16.2%
 
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
95 101 122 66 89 244 255 329    
 
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
1.8:1   1:1.2 1.1:1   1:2.1
 
Net Commitment Change (i)  
3,356  


Live Cattle Commitments of Traders Report - 10 Oct 2017 (i)


Futures Only Positions, CME , Code 57642, (Contracts of 40,000lbs) (i)

Reporting Firms (i) Non-Reportable Positions (i)
Non-Commercial (i)
Commercial (i) Total Reportable (i)
 
Commitments (i) Open (i) Interest Commitments
Long (i) Short (i) Spreads (i) Long Short Long Short Long Short
145,551 33,468 32,345 125,697 213,493 303,593 279,306 329,911 26,318 50,605
 
Changes from 3 Oct 2017 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
981 -4,019 -3,609 -2,048 979 -4,676 -6,649 -3,840 836 2,809
 
Percent of Open Interest for Each Category of Trader (i)
Long Short Spreads Long Short Long Short   Long Short
44.1% 10.1% 9.8% 38.1% 64.7% 92.0% 84.7%   8.0% 15.3%
 
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
131 75 113 100 165 291 311 408    
 
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
4.3:1   1:1.7 1.1:1   1:1.9
 
Net Commitment Change (i)  
5,000  

Also see:

Spread Betting on Lean Hogs During the Swine Flu Epidemic


Below, an article by Tradefair Spreads on trading the lean hogs market, 30-Apr-09.

Swine flu. That’s what I’m here to talk about. This isn’t investment advice, it’s simply a description of recent experiences and an example of how news, events and current affairs can affect markets. You shouldn’t think of it as advice to trade.

When I was a kid, I was captivated by the film Trading Places, starring, amongst others, Eddie Murphy, Dan Aykroyd and Jamie Lee Curtis as the kind-hearted prostitute (?). I’m not going into the plot here but if you haven’t seen it, it’s well worth a watch.

What I will tell you is that towards the end, there’s a scene where you see a busy Wall Street-style trading floor with commodities dealers running all over the place shouting and exchanging paper tickets. One of the commodities in question was pork belly futures.

Oddly enough, Trading Places was on the box the other night and I hadn’t seen it for years so I sat through it. I still love that trading scene.


Tradefair Trading


Here’s the point. Last Friday (24th April), it was rumoured that some Mexicans had caught flu off some pigs. Some of them had died; the Mexicans, I don’t know about the pigs. Saturday, the news was bigger. Swine flu: the end of civilization as we know it... global wipeout... running out of face masks... (where else do you wear a mask?)... drugs for only half the population...

So as I was taking the papers to bits on Saturday lunchtime, the thought came to me. Out of the two thousand-plus instruments on the Tradefair Spreads platform, could there be such a thing as pork belly futures?

I did a search which returned “No products found.” So I looked under the commodities menu and on the basis that pork bellies are soft, clicked on “soft commodities.” No sign of pork belly futures but, what’s this... Lean Hogs June.

Friday’s chart showed a moderate rise followed by a gentle, then relatively steep decline, below.

Lean Hogs Chart


Now, even though you can’t contract flu from eating pork (assuming you cook it, which is generally the idea), I surmised that this market would be affected thus: If consumers stop buying bacon, ham and the Sunday joint because of fear, the wholesalers can’t flog it to the supermarkets.

The underlying market and its derivative are bound to suffer and before you can say “oak smoked rasher,” the Agriculture Minister is ordering giant pork barbecues to which no one is invited except the poor piggies and getting his kids to eat bacon sarnies in front of the TV cameras to show everything’s all right.

I did a bit of digging. The US is full of pigs. No seriously, they’re the world’s biggest exporter of pork product. The Lean Hogs Futures price tends to be at its highest around May and June (i.e, where we are now) because that’s when the pigs are herded to market for sale. Another interesting nugget I picked up is that if the price of corn goes up, the pigs go to market earlier because they’re fed mostly corn, and the farmers don’t want to pay the extra cost to feed them.

The following Monday I had another look at the chart but nothing had happened because the Lean Hogs Futures market trades only between 15:06 (weird time, but still) and 19:00. I left the chart open and at about ten past three looked up and saw this:

Lean Hogs Candlestick Chart


Why couldn’t I have thought of snorting, sorry shorting, this on Friday? But at least the news was getting worse – from a trading point of view, anyway.

I stuck my £1 short trade on Lean Hogs June and on Monday (27th April) the market pootled up and down a bit and by the end of the day I was £9 in the red (the spread’s pretty wide compared to something like the FTSE and the minimum margin is 150).

When Lean Hogs June finally got out of bed at 15:06 Tuesday afternoon, the market had indeed suffered further and my trade was showing a profit of £80. Down Lean hogs went, and at one point the profit showing was £270. Like the trader that I am, I was pulling my stop losses down (stop losses aren't guaranteed) to protect my profit.

The market rallied a little bit and hit my stop loss probably thanks to the Dow shooting up but I eventually trousered £185.

I got back in the game yesterday (Wednesday 29th April), but not all went to plan. As I expected, there was another overnight decline which gave me an instant profit of £60. But the pigs were staging a fightback and before much longer my profit suffered a £50 shrinkage. I banked the ten quid and tried to ignore it and get on with some work.

Later on I had another look at the chart and decided to risk another £50 by shorting at a pound a point and pulling my stop loss in. Nope, the hogs weren’t having it, they rallied slowly and that was another £50 in the wrong column.

But all in all, this series of trades was a success: total pig profit of £135. It could have been better but that’s the thing about trading; you can’t win ’em all. Think I’ll celebrate with a pint. And packet of pork scratchings.


Alternatives to Lean Hogs Trading


Below, an article by PaddyPowerTrader on the alternatives to spread betting on lean hogs during a pandemic, 27-Apr-09.

The threat of global pandemic has created a market roller coaster for spread bettors.

The threat of a global pandemic of swine flu has set markets around the world tumbling as finance experts await news of the spread of the respiratory disease.

The Dow Jones Industrial Average index and the FTSE 100 have been just staying level since the confirmed outbreak started in Mexico on Friday. The international fluctuations seem to have favoured certain stocks however, as pharmaceutical giants GlaxoSmithKline and Roche both rose in value. The two giants have provided drugs to help prevent previous pandemics such as the SARS virus and Avian Flu in the past.

Foreign exchange also seems to be a popular market as the US Dollar strengthens against the Peso, Euro and British Pound. The US dollar is sometimes bought in a flight to safety type trade when international markets are in turmoil.

The swine flu is bolstering the US currency according to paddypowertrader. The company has seen spread bettors keenly follow the sharp rise in the price of the US dollar, over the past four days

The continuing global recession is unlikely to be helped by the outbreak of swine flu. Airline, hotel and leisure stocks dropped sharply as an outbreak of swine flu in North America raised fears of a further downturn in travel already depressed by the weak global economy.

However, spread bettors can be well positioned to take advantage of price-movement in either direction.

“Paddypowertrader has watched increasing numbers of spread bettors starting to move into US currency, airline stocks and pharmaceutical equities in the last couple of days. The number of trades on pharma stocks and airlines has significantly grown since the news of the outbreak hit the headlines in Mexico late last week,” said Davin McAnaney of paddypowertrader.

“This week we have seen spread bettors moving into plenty of short positions on indices and airlines and long positions on pharmastocks,” added McAnaney.


Commodities Analysis, Charts and Prices


For the latest analysis of the commodities markets as well as live chart and prices see our commodities spread betting section.


Trading Risk Warning
'Trading and Spread Betting on Lean Hogs' edited by Jacob Wood, updated 19-Oct-17

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