Lean hog futures settled the Christmas Eve trading session lower, but they finished the holiday-shortened trading week higher. Prices enjoyed a noteworthy rally this week, driven by stronger demand, a bullish US government report, and the strength in the cash market. Can lean hogs keep up the momentum in 2021?

February lean hog futures shed 0.90 cents, or 1.33%, to 66.95 cents per pound on Thursday on the Chicago Mercantile Exchange (CME). Lean hog prices recorded a weekly gain of 2.37%, reducing their year-to-date decline to around 6%.

Prices had been trading at their best levels in about two months, allowing the commodity to eat away at its 2020 loss.

According to the US Department of Agriculture (USDA) domestic frozen pork belly stocks stood at 23.111 million lbs in the week ending November 30. This is down from 54.416 million at the same time a year ago. The data point to tightening pork inventories and the early estimates suggest that there has been no rebuilding for the last nine months.

In a separate report from the USDA suggested that the size of the US hog herd as of December 1 was 99% of last year’s. Also, the USDA confirmed that pork export sales slumped to 39,700 tons in the week ending December 17, down from 84,200 tons in the previous week.

Foreign demand for US pork has been strong in the home stretch of 2020, particularly from China, as the country began its Lunar New Year holiday. China, meanwhile, is continuing to rebuild its hog supplies following last year’s devastating African swine flu that wiped out half of its hog population.

In other agricultural commodities, January corn futures rose $0.0325, or 0.73%, to $4.505 per pound. January wheat futures shed $0.02, or 0.32%, to $6.2775 a bushel. January soybean futures picked up $0.0475, or 0.38%, to $12.6475 per bushel.