Taking Advantage of Undervalued US Hog Prices (Trade idea)

China's ASF-Driven Appetite for US Pork

1. Charts (in order) Monthly/Weekly/Daily

   Monthly: It’s bouncing off of long term support.

   Weekly: Hogs are breaking out of a falling wedge pattern.

   Daily: The bullish crossover system is activated.

   

   Last year, the European Union (EU) experienced a significant decrease in its livestock population due to a severe drought. As a result, the prices of livestock products in the EU have risen significantly, surpassing $1.00. Currently, these EU prices are about 25% higher than the expected future prices in the United States. This suggests that we can expect prices in the United States to rise in the near future.
   
   In 2023, the United States faced significant losses in its pork supplies, and this is expected to continue into 2024. However, there are several factors at play that suggest higher demand for US pork. First, domestic demand is likely to rise as beef supplies decrease. Second, China's imports of pork are expected to increase due to a meat protein shortage caused by the aftermath of African Swine Fever (ASF), which will peak in the summer of 2024.

   California's Proposition 12, which affects pork production practices, has already been factored into market prices. Additionally, the exceptionally high hog prices in the European Union (EU) are causing other pork importers outside of China to look to the US for replacement supplies.