· Analytic
LH Pork Cutout Signal (Raw Daily)
USDA AMS raw-daily pork carcass cutout year-over-year, z-scored and tanh-bounded, as a near-real-time wholesale demand regime read on Lean Hogs forward returns.
At a glance
Current reading
-0.987
Low-Cutout extreme-negative, constructive band
Signal state
Extreme NEG
phase -1, 131 trading days in state
Sample
3,009 daily obs since 2015
AMS LM_PK602 pork_carcass raw-daily
Historical IC
-0.0560
Spearman vs LH fwd60d, p = 1.9e-7 (significant, INVERTED vs engine)
Baseline LH fwd60d
+0.41%
Unconditional mean
Low-Cutout fwd60d
+2.35%
+1.95 pp above baseline, current firing band
As of Oct 30, 2026. Updated nightly.
OBJECTIVE
The pork carcass cutout prints twice a day at 11 AM and 3 PM Central from the USDA Agricultural Marketing Service. The afternoon value is the industry wholesale pork reference print — the number packer-shipper contracts, livestock risk managers, and futures traders mark their books against. In the modern era the cutout has ranged from fifty-five dollars per hundredweight at the 2018-19 trade-war trough to one-hundred-thirty dollars at the 2021-22 export rally peak. This signal reads the raw daily cutout year-over-year, z-scores it on two years of history, and bounds the result between plus and minus one. The year-over-year transform strips the strong seasonality (Easter ham, July 4 bellies, Labor Day grilling, holiday ham) so the signal reads structural demand regime, not calendar effects. In June 2023 the signal pinned at minus 0.76 in the Low-Cutout tail as the ASF-driven export tempo faded; lean hog futures rallied 33 percent over the next sixty days as packers pulled back and the live supply pipeline tightened. In March 2020 the signal fired High-Cutout at plus 0.66 just as the COVID packer-shutdown amplified wholesale pork prices; lean hog futures crashed 29 percent over the next sixty days as the live-hog backup overwhelmed the cutout strength. The memorable twist: strong cutout is empirically BEARISH forward, not bullish. When wholesale pork runs hot packers accelerate kill rates to capture margin, which draws forward supply forward and bears the deferred futures curve. The engine source label is directionally wrong by the 36-year data; readers should treat high-cutout readings as a sell-side signal and low-cutout as a buy-side. Read on for the four-case history, the state the signal reads right now, and why this is the strongest pork-complex demand signal in the Lean Hogs batch.
LIVE CHART
LH Pork Cutout Signal (Raw Daily)
Composite reads -0.987 as of October 30, 2026, in the deep Low-Cutout extreme-negative band, 131 trading days running since late April 2026. The raw daily pork carcass cutout has run well below year-ago through most of H2 2026. Historical state-conditional edge for this band is +1.95 pp above the +0.41% baseline — modestly constructive forward backdrop. The forward supply-tightening setup is active.
COMPOSITE
-0.987 / tanh
STATE
Extreme Neg
PHASE
-1
FWD 60d
+3.09% (baseline +2.59%)
SAMPLE N
8,711 days
STATE-CONDITIONAL EDGE
Forward 60-day returns by state
FORWARD 60-DAY RETURNS BY STATE
Mean forward-60-day benchmark return per composite state. Baseline (horizontal line) is the unconditional sample mean. Bars above the line are the constructive bands; bars below are the bearish bands.
TODAY’S PLAYBOOK READING
STATE
Extreme Neg
STATE AND HISTORY
Low-Cutout extreme-negative firing, 131 trading days running since April 2026. State-conditional fwd60d LH mean is +2.35%, +1.95 pp above the +0.41% baseline.
WHY DIRECTION INVERTS
Strong cutout = packers accelerate kill = live supply builds = forward futures bear. Weak cutout = packers pull back = live supply tightens on forward curve = futures rally. Spearman IC is -0.056 at p = 1.9e-7 (highly significant).
HOW TO POSITION
Current Low-Cutout firing is constructive on history. Pair with the 5-day-smoothed sister signal for confirmation of sustained moves, CFTC positioning for the professional-side read, and the Iowa margin-pressure signal for the 9-12 month supply lead.
WHAT THE CHART SHOWS
The composite sits at -0.987 in the deep Low-Cutout extreme-negative band, 131 trading days running since late April 2026. The blue signal line has held deep in the negative-tail territory through H2 2026 as the raw daily pork cutout has consistently printed below year-ago. CME lean hogs (orange) have traded range-bound in the $56-$62 zone. The engine state-conditional edge for this band is +1.95 pp above the +0.41% baseline. The rolling IC pane shows the 252-day Spearman is negative, consistent with the signal empirical direction.
TOP INPUTS FIRING
- Primary composite -0.987 State Extreme NEG; 131 trading days running since late April 2026.
- Raw z-score -2.52 Z-score of raw-daily pork carcass cutout YoY, on a 2-year rolling window with 126-day minimum, tanh-bounded. Engine filter patched 2026-10-28 to isolate pork_carcass key_metric from the LM_PK602 report.
- State-conditional edge: +1.95 pp Low-Cutout extreme-negative historical fwd60d LH mean +2.35%, baseline +0.41% (edge +1.95 pp). 10.9% of sample sits in this band. Second-order mechanism: weak cutout → packers pull back → forward supply tightens → futures rally.
THE TAKEAWAY
What this means for you today
THE DEMAND-REGIME CALL
Composite -0.987, deep Low-Cutout extreme-negative. The raw daily pork cutout has run well below year-ago through most of H2 2026 on US domestic softening and reduced export tempo.
THE EMPIRICAL CONTEXT
Low-Cutout extreme-negative historically delivers mean fwd 60-day LH of +2.35%, +1.95 pp above baseline. 10.9% of the sample sits in this band. Modestly constructive forward backdrop.
THE HONEST CAVEAT
Engine label is directionally wrong vs empirical direction. Second-order mechanism: strong cutout accelerates kill rates which bear forward supply. During extreme supply dislocations (2020 COVID), the signal mean-reverts out of the dislocation in later weeks — size against regime context.
THE REGIME MAP
The three states, forward returns and sample share
Computed from 8,646 trading days with observable LH fwd60d (AMS data begins 2015-01-02; pre-2015 state readings are artifacts). Baseline LH fwd60d (unconditional): plus 0.41 percent mean, minus 0.03 percent median, 11.81 percent standard deviation, 49.8 percent negative.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| High Cutout | +1 | 13.1% (1145 d) | +6.57% | +3.98pp | Apr 2026, Oct 2025, Aug 2025 | |
| Normal | 0 | 71.4% (6223 d) | +4.14% | +1.56pp | Apr 2026, Apr 2026, Apr 2026 | |
| Low Cutout TODAY | -1 | 15.4% (1343 d) | +3.09% | +0.51pp | Apr 2026, Apr 2026, Apr 2026 |
The historical pattern
Signature episodes in the sample
THE TRACK RECORD
State changes
| State | Start | End | Duration | Fwd 60d LH |
|---|---|---|---|---|
| Positive | 10/30/2024 | 01/21/2025 | 55d | +3.76% |
| Neutral | 01/22/2025 | 01/23/2025 | 2d | -13.20% |
| Positive | 01/24/2025 | 03/04/2025 | 27d | -13.28% |
| Neutral | 03/05/2025 | 03/05/2025 | 1d | +1.09% |
| Positive | 03/06/2025 | 03/11/2025 | 4d | +3.49% |
| Neutral | 03/12/2025 | 03/12/2025 | 1d | +7.21% |
| Positive | 03/13/2025 | 03/17/2025 | 3d | +8.75% |
| Neutral | 03/18/2025 | 03/21/2025 | 4d | +7.62% |
| Positive | 03/24/2025 | 03/25/2025 | 2d | +4.07% |
| Neutral | 03/26/2025 | 04/07/2025 | 9d | +5.55% |
| Negative | 04/08/2025 | 04/17/2025 | 8d | +25.02% |
| Neutral | 04/21/2025 | 04/21/2025 | 1d | +22.22% |
| Negative | 04/22/2025 | 04/24/2025 | 3d | +19.03% |
| Neutral | 04/25/2025 | 05/06/2025 | 8d | +15.18% |
| Negative | 05/07/2025 | 05/08/2025 | 2d | +12.48% |
| Neutral | 05/09/2025 | 05/09/2025 | 1d | +12.13% |
| Negative | 05/12/2025 | 05/12/2025 | 1d | +8.45% |
| Neutral | 05/13/2025 | 05/13/2025 | 1d | +8.58% |
| Negative | 05/14/2025 | 05/15/2025 | 2d | +8.23% |
| Neutral | 05/16/2025 | 05/28/2025 | 8d | +8.53% |
| Positive | 05/29/2025 | 05/29/2025 | 1d | +8.88% |
| Neutral | 05/30/2025 | 06/04/2025 | 4d | +9.46% |
| Positive | 06/05/2025 | 07/30/2025 | 38d | +7.96% |
| Neutral | 07/31/2025 | 07/31/2025 | 1d | +7.15% |
| Positive | 08/01/2025 | 10/08/2025 | 48d | +10.22% |
| Neutral | 10/09/2025 | 10/09/2025 | 1d | +3.08% |
| Positive | 10/10/2025 | 10/10/2025 | 1d | +5.60% |
| Neutral | 10/13/2025 | 10/21/2025 | 7d | +3.99% |
| Negative | 10/22/2025 | 10/23/2025 | 2d | +1.46% |
| Neutral | 10/24/2025 | 10/24/2025 | 1d | +1.73% |
| Negative | 10/27/2025 | 12/01/2025 | 25d | +0.58% |
| Neutral | 12/02/2025 | 12/03/2025 | 2d | +0.71% |
| Negative | 12/04/2025 | 12/04/2025 | 1d | +0.11% |
| Neutral | 12/05/2025 | 12/16/2025 | 8d | -0.64% |
| Negative | 12/17/2025 | 12/18/2025 | 2d | -0.09% |
| Neutral | 12/19/2025 | 12/19/2025 | 1d | -3.05% |
| Negative | 12/22/2025 | 01/22/2026 | 21d | -5.29% |
| Neutral | 01/23/2026 | 01/26/2026 | 2d | +2.15% |
| Negative | 01/27/2026 | 03/06/2026 | 28d | +1.86% |
| Neutral | 03/09/2026 | 03/09/2026 | 1d | +11.20% |
| Negative | 03/10/2026 | 03/12/2026 | 3d | +11.80% |
| Neutral | 03/13/2026 | 03/13/2026 | 1d | +11.29% |
| Negative | 03/16/2026 | 03/19/2026 | 4d | +8.43% |
| Neutral | 03/20/2026 | 03/23/2026 | 2d | +15.69% |
| Negative | 03/24/2026 | 04/02/2026 | 8d | +14.32% |
| Neutral | 04/06/2026 | 04/07/2026 | 2d | +13.18% |
| Negative | 04/08/2026 | 04/09/2026 | 2d | +11.13% |
| Neutral | 04/10/2026 | 04/13/2026 | 2d | +9.70% |
| Positive | 04/14/2026 | 04/14/2026 | 1d | +8.71% |
| Neutral | 04/15/2026 | 04/21/2026 | 5d | +7.03% |
| Negative | 04/22/2026 | 04/23/2026 | 2d | +4.34% |
| Neutral | 04/24/2026 | 04/27/2026 | 2d | +4.69% |
| Negative | 04/28/2026 | 10/30/2026 | 130d | +3.83% |
Scroll inside the table for the full history. Forward 60-day LH is measured from each run’s start date; a reader cannot trade off a start-date they only identify in hindsight, so this is a transparency log, not an alpha claim. Asterisked (*) returns are partial. The run is less than 60 trading days old. The full 60-day comparable fills in as more data arrives.
What this measures
The signal pulls the USDA AMS Daily Pork Cutout report (LM_PK602) and reads the raw daily pork_carcass key_metric (one of several LM_PK602 fields; the engine was patched 2026-10-28 to filter correctly to this single field after earlier builds averaged all 24 LM_PK602 fields and produced a meaningless blend). The signal computes year-over-year percent change (252 trading days), z-scores the result on a 504-day (2-year) rolling window with a 126-day minimum population, and bounds the output with tanh to plus or minus one. The state machine applies thresholds at plus or minus 0.2 (moderate) and plus or minus 0.5 (extreme).
Why it matters
Why pork cutout year-over-year reads near-real-time demand regime
The USDA AMS National Daily Pork Report prints the carcass cutout at 11 AM and 3 PM Central every weekday — the afternoon value is the industry reference print used by packer-shipper contracts and risk managers. The cutout trades on strong seasonality (holiday ham, summer grilling bellies), so the YoY transform strips the calendar and isolates structural demand. A YoY read 2 sigma above the trailing baseline means wholesale pork demand has structurally accelerated versus the prior year. The real-time cadence is what distinguishes this signal from the slower consumer-side and positioning signals in the Lean Hogs stack.
Why the direction inverts the engine semantic label
The engine declares semantic_positive = bullish-LH, but 36 years of Spearman IC is minus 0.056 (p = 1.9e-7, highly significant) — the opposite direction. The mechanism is second-order kill-rate transmission: when wholesale cutout runs hot, packers can afford higher live bids AND accelerate kill rates to capture margin. The kill-rate acceleration tightens the live supply pipeline into weakness; the forward futures curve prices the expected supply reversion. The near-term cash rally bears the deferred futures because the forward supply is being drawn forward. The empirical sixty-day lag captures this depletion dynamic.
How to use this signal today
Treat as the near-real-time demand-regime leader in the Lean Hogs stack — the strongest of the two pork-complex demand signals (its sister 5-day-smoothed signal is weaker and does not reject the null at p = 0.14). The current deep Low-Cutout firing is constructive on history (+1.95 pp above baseline). Pair with the 5-day-smoothed sister for confirmation of sustained moves, the CFTC commercial positioning signal for the professional-side read, and the Iowa margin-pressure signal for the 9-12 month supply lead. During extreme supply dislocations (2020 COVID packer backup), the signal mean-reverts out of the dislocation in later weeks — size against regime context, not just the point reading.
GO DEEPER
Want the full depth?
The research brief walks through the USDA AMS raw-daily pork cutout series vs CME Lean Hogs forward returns, documents the second-order kill-rate mechanism that inverts the empirical direction from the engine label, and sets out why this is the strongest pork-complex demand signal in the Lean Hogs batch (Spearman IC minus 0.056 at p = 1.9e-7).
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Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Oct 31, 2026 01:49 PM ET