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Breakout in Lean Hog Futures - how high can we go?

As consumers and restaurants continue to feel the pain of higher protein prices, the run in lean hog futures isn't over.  After setting up a very nice ascending triangle pattern we finally have a breakout above the $128.50 resistance level, in fact the breakout is the highest level we've ever seen.  Much of the run up in hog prices has been due to falling supply in hogs (due to swine-disease outbreaks in US and Europe), as well as the price increases in competing proteins (mainly beef). 

Lean hog futures are up 53% since February 2014

With the bullish breakout, we see no reason for the price escalation to slow down in the near term.  We have an upside target of $136.00 with a stop loss entered at $127.20, and the US Agriculture Dept's latest forecast would support further upside as US Pork exports are expected to fall 190,000 tons this year or 8.6%.

Chart via


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