What is a slim pig?
Lean HOG is a technical designation used in trading with commodities of pork products, most often through Mercantile Exchange in Chicago. The term refers to most of the edible meat harvested from the carcase. Pork abdomen, which are mainly used to produce bacon, are traded and prices as a separate commodity. Futures Futures Lean Hog is traded wide and the timing of delivery is related to the Agricultural Production cycle.
Commodity markets are relatively strongly regulated and most commodities are governed by standard trading limits. Lean Hog trading is limited to the limits of most markets. The limit is used to limit the volatility of determining prices for a given commodity by bordering tailor -made to which the price of this commodity can fluctuate in one single day of trading. This is intended for commodity markets to be somewhat predictable to the buyers and the seller so that they can more efficiently manage supply and demand for communication. Limit Lean Hog traded in ChicagoIt is 3 cents per pound per day, although more fluctuations are allowed at the very end of the contractual cycle.
Futures contracts are generally written according to standard rules. Futures Lean Hog trading contracts are no exception to this rule. The purpose of this policy, as well as the use of the price for fluctuations in terms of trading prices, is to streamline the business process. The standard Futures Lean Hog contract represents £ 40,000.
All agricultural commodities are tied to seasonal production cycles. The Hogs require an average of six months before they are fully ripe and can be sold for consumption. This is combined with weather and other seasonal factors in such a way that more pigs come to the market during the summer months. Standard futures contracts are available every month until the end of spring Aleto, but only every second month for the rest of the year.
The price of Lean Hog contracts differs quite widely. Is affectedOn global demand for pork products, including rapidly growing demand from emerging Asia economies. The price is also influenced by the price of feed for pigs, especially corn. Higher corn prices will produce higher prices of pigs in the long run because it is more expensive to increase and fattening animals, but in a short -term horizon of lower price, because farmers decide to avoid paying more for feeding and selling pigs before they would otherwise. This second trend reduces prices by increasing the offer.