· Analytic
LH CHIRPS China Hog NCP (Demand Pulse)
Dryness in China’s biggest hog-production belt, read as the engine’s a-priori demand-pulse call that the 34-year engine data partially inverts at the extremes.
At a glance
Current reading
+0.337
NCP precip composite, inverted, tanh-bounded
Signal state
Moderate POS
5 trading days in state since 2026-10-21
34-year sample
9,046 trading days
1990-11-29 through Oct 30, 2026
Historical IC (h=60)
-0.0093
Spearman, LH fwd60d, p = 0.380 (near-noise, polarity inverted at extremes)
Baseline LH fwd60d
+0.26%
Unconditional mean over 8,986 observable fwd60d days
Deep Dry fwd60d
-0.35%
-0.61 pp below baseline, n = 3,439 (opposite engine’s a-priori)
As of Oct 30, 2026. Updated nightly.
OBJECTIVE
China produces and consumes roughly half the world’s pork. The North China Plain is the densest production zone. Pre-African-Swine-Fever Chinese pork production ran about 54 million metric tons annually with US exports to China around 200 thousand metric tons; by the 2020 ASF trough Chinese production had fallen roughly 13 million metric tons and US exports peaked near 700 thousand metric tons. This signal reads daily satellite precipitation across the belt, inverts the sign so dry prints positive, and bounds the result from minus one to plus one. On December 18, 2020, during the ASF-COVID compound shock, the composite at +0.64 preceded LH plus 44.9 percent over 60 days. On December 24, 2013, during a Chinese pork cycle expansion, the composite at +0.68 preceded LH plus 32.6 percent, the archetype of what the engine’s a-priori expected. On November 6, 2019, during the acute ASF phase, the composite at +0.52 preceded LH minus 25.7 percent as the near-term demand pulse had already passed. Today it reads +0.337, 37 trading days running in deep dry. Here is the honest finding. The engine’s a-priori called positive composite bullish for Lean Hogs on the demand-pulse mechanism (NCP drought leading to Chinese production stress leading to US import pull). The 34-year sample shows the deep-dry state has delivered mean fwd60d LH of minus 0.35 percent, 0.61 points below baseline; the abundant-rain state has delivered plus 1.60 percent, 1.34 points above baseline. The empirical polarity is inverted versus the engine’s a-priori at both extremes. Read on for three cases that frame the pattern with its empirical polarity, the state-conditional evidence, and the four caveats that keep this a research-stage artifact rather than a sized trade.
LIVE CHART
34 years of North China Plain precipitation, read with its empirical polarity.
The composite reads +0.337, state Moderate POS, 37 trading days running since September 10, 2026. The engine’s a-priori reads positive composite as bullish LH via the China demand-pulse mechanism, but the 34-year sample inverts this at the extremes ; the deep-dry tail has delivered mean fwd60d LH of minus 0.35 percent (0.61 points below baseline), and the abundant-rain tail plus 1.60 percent (1.34 above baseline). Readers should apply the empirical polarity at the tails rather than the engine’s a-priori.
COMPOSITE
+0.337 / tanh
STATE
Moderate Pos
PHASE
+1
FWD 60d
+1.18% (baseline +0.26%)
SAMPLE N
9,049 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
Moderate Pos
STATE AND HISTORY
Deep Dry (per engine convention), 5 trading days running. Historical extreme-pos entries have delivered mean fwd60d LH of -0.35%, below baseline.
WHY THE ENGINE POLARITY IS INVERTED
The ASF compound-shock era distorts the sample. Also, the demand-pulse transmission pathway from NCP weather to US LH is thinner than the a-priori assumes due to Chinese cold-storage reserves, MOFCOM import licenses, and currency effects.
POSTURE FOR THE WEEKS AHEAD
With empirical polarity applied, mild downside bias at 60-day horizon. The 2019 ASF-timing-mismatch is the clearest counter-case where deep-dry signal preceded LH decline.
WHAT THE CHART SHOWS
The composite sits at +0.337, state Moderate POS, 37 trading days running in the current healthy phase. The blue signal line and LH futures (orange) are visible on the chart together across 34 years. Reading the chart with the engine’s a-priori, positive composite reads bullish LH via the China demand-pulse mechanism. Reading it with the empirical polarity the 34-year sample demands, the deep-dry tail has delivered minus 0.35 percent fwd60d (0.61 points below baseline) and the abundant-rain tail plus 1.60 percent (1.34 above baseline) ; opposite to the a-priori at both extremes.
TOP INPUTS FIRING
- Primary composite +0.337 State Moderate POS; 37 trading days running in the current healthy phase since September 10, 2026.
- Raw z-score +0.35 30-day trailing precipitation mean across the North China Plain hog belt, z-scored on a 5-year window with 252-day minimum, sign-flipped so dry prints positive, tanh-bounded.
- Empirical polarity at the extremes Deep-dry historical fwd60d LH mean minus 0.35 percent (0.61 points below baseline); abundant-rain plus 1.60 percent (1.34 above baseline). Opposite to the engine’s a-priori at both tails.
THE TAKEAWAY
What this means for you today
THE DEMAND-PULSE CALL (REFRAMED)
The engine’s intuition was that NCP drought should pull US pork exports. The 34-year engine data partially supports this at mid-sample but inverts at the extremes. The deep-dry tail has historically preceded modestly below-baseline LH forward returns, likely because the transmission pathway is thin and the ASF era distorted the window.
THE EMPIRICAL POLARITY
extreme-pos -0.61 pp below baseline; extreme-neg +1.34 pp above. Readers consuming the raw engine output must apply the sign flip at the extremes. The parent LH composites should treat with polarity sign -1.
THE HONEST CAVEAT
The 2013 case shows the demand-pulse mechanism worked once in the sample on a clean pre-ASF expansion cycle. The 2019 case shows it failed during ASF timing-mismatch. The 2020 compound-shock cases should be treated as outliers. The signal is byte-identical to the sister engine LH CHIRPS China NCP (Feed-Cost Framing) at china-hog-belt-ncp; parent composites must not double-wire. This is a slow-moving signal (half-life approximately 60-90 trading days) and should be read as a research-stage artifact with its empirical polarity applied.
THE REGIME MAP
The three states, forward returns and sample share
Computed from 8,986 trading days with observable LH fwd60d. Baseline LH fwd60d (unconditional): plus 0.26 percent mean, minus 0.24 percent median, 10.9 percent standard deviation, 51.7 percent negative.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Deep Dry (engine) | +1 | 38.0% (3442 d) | -0.23% | -0.49pp | Sep 2026, Mar 2026, Mar 2026 | |
| Normal | 0 | 11.4% (1034 d) | +0.30% | +0.04pp | Aug 2026, Jun 2026, Jun 2026 | |
| Abundant Rain | -1 | 21.4% (1938 d) | +1.83% | +1.57pp | Jul 2026, Aug 2025, Jun 2025 |
The historical pattern
Signature episodes in the 34-year sample
THE TRACK RECORD
State changes
| State | Start | End | Duration | Fwd 60d LH |
|---|---|---|---|---|
| Deep Dry (engine) | 10/30/2024 | 05/08/2025 | 131d | +3.76% |
| Normal | 05/09/2025 | 05/09/2025 | 1d | +12.13% |
| Deep Dry (engine) | 05/12/2025 | 05/21/2025 | 8d | +8.45% |
| Normal | 05/22/2025 | 05/30/2025 | 6d | +9.73% |
| Deep Dry (engine) | 06/02/2025 | 06/17/2025 | 12d | +9.10% |
| Normal | 06/18/2025 | 06/18/2025 | 1d | +10.62% |
| Abundant Rain | 06/20/2025 | 10/30/2025 | 93d | +11.06% |
| Normal | 10/31/2025 | 10/31/2025 | 1d | +1.76% |
| Deep Dry (engine) | 11/03/2025 | 04/21/2026 | 116d | +1.26% |
| Normal | 04/22/2026 | 04/27/2026 | 4d | +4.34% |
| Deep Dry (engine) | 04/28/2026 | 05/15/2026 | 14d | +3.83% |
| Abundant Rain | 05/18/2026 | 05/20/2026 | 3d | +5.31% |
| Normal | 05/21/2026 | 05/22/2026 | 2d | +3.33% |
| Abundant Rain | 05/26/2026 | 05/29/2026 | 4d | +1.60% |
| Normal | 06/01/2026 | 06/02/2026 | 2d | +0.99% |
| Abundant Rain | 06/03/2026 | 06/15/2026 | 9d | +2.00% |
| Normal | 06/16/2026 | 06/24/2026 | 6d | +1.86% |
| Deep Dry (engine) | 06/25/2026 | 06/26/2026 | 2d | +5.34% |
| Normal | 06/29/2026 | 07/02/2026 | 4d | +3.62% |
| Abundant Rain | 07/06/2026 | 08/27/2026 | 39d | +1.72% |
| Normal | 08/28/2026 | 09/09/2026 | 8d | |
| Deep Dry (engine) | 09/10/2026 | 10/30/2026 | 37d |
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 engine queries CHIRPS satellite daily precipitation for region = china-hog-belt-ncp, takes a 30-day trailing mean, z-scores on a trailing 1,260-day window with a 252-day minimum population, sign-flips so dry reads positive, and bounds by tanh.
Why it matters
Why China weather informs US Lean Hogs at all
China produces and consumes roughly half the world’s pork, and the North China Plain is the densest production zone in the country. The mechanism the engine was built on is intuitive. Dryness in the North China Plain means feed-corn and feed-soy basis stress means Chinese hog producer margin compression means herd liquidation means Chinese pork demand pulls on US exports. During pre-ASF equilibrium US exports to China ran around 200 thousand metric tons annually. At the 2020 ASF trough US exports to China peaked near 700 thousand metric tons. That is the demand-pulse the engine was designed to read.
Why the 34-year sample partially inverts the mechanism
The empirical direction at the extremes is opposite to the engine’s a-priori. The deep-dry state has delivered mean 60-day forward Lean Hog returns of minus 0.35 percent, 0.61 points below the plus 0.26 percent baseline. The abundant-rain state has delivered plus 1.60 percent, 1.34 points above baseline. Two likely reasons. First, the ASF compound-shock era (2018 through 2020) dominates the deep-dry sample with observations where Chinese production stress was already acute and the weather signal rode along rather than led. Second, the transmission pathway from NCP weather to US pork export pull is thinner than the a-priori assumes. Chinese cold-storage reserves, MOFCOM import license allocation, and currency effects all modulate transmission. The engine’s intuition was not wrong; the sample simply demanded we read it with the empirical polarity rather than the a-priori polarity.
How to use this signal today
Today the composite reads plus 0.68 in deep dry, 5+ weeks running. If you read the signal with its engine a-priori, you would call it bullish. If you read it with the empirical polarity the 34-year sample demands, you would call it mildly bearish at 60-day horizon. The honest answer sits between those two reads, closer to the empirical. The signal is byte-identical in construction to the sister engine LH CHIRPS China NCP (Feed-Cost Framing) at the same region; parent composites must not double-wire it. Treat as a slow-moving research-stage artifact with a half-life of approximately 60 to 90 trading days. Weight small, never standalone, always with the empirical polarity applied at the extremes.
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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 Nov 02, 2026 05:37 AM ET