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LH CHIRPS China NCP (Feed-Cost Framing)

North China Plain precipitation framed as a feed-cost gauge for the restructured post-ASF Chinese hog industry, byte-identical by construction to its demand-pulse sibling with the same empirically-inverted polarity at the extremes.

At a glance

As of Oct 30, 2026. Updated nightly.

OBJECTIVE

The African Swine Fever outbreak of 2018-19 killed roughly half of China hog herd, forced a wave of consolidation that pushed independent backyard producers out of the market, and left the industry dominated by vertically-integrated systems that run on contract feed. For the restructured industry, feed cost is the dominant margin lever: Chinese hog producers now source corn primarily from domestic production centered in the North China Plain, so NCP precipitation directly affects Chinese hog operating margins. This signal reads 30-day trailing precipitation across the North China Plain, z-scores it on five years of history, sign-flips so dry prints positive, and bounds the result between plus and minus one. The engine mechanism: NCP drought → Chinese feed-corn supply stress → Chinese hog producer margin squeeze → hog cycle acceleration → global protein-trade knock-on to US lean hog futures. The engine data store is byte-identical to the demand-pulse sibling signal — same CHIRPS query, same transform. The two signals differ only in editorial framing. The memorable twist: the engine a-priori calls deep-dry (extreme-positive) bullish lean hogs; 36 years of data inverts this. Deep-dry delivers minus 0.35 percent mean fwd60d LH (minus 0.61 pp below the plus 0.26 percent baseline), while abundant-rain delivers plus 1.60 percent (plus 1.34 pp above baseline). Both extremes point the opposite direction of the engine mechanism. Readers must apply the empirical polarity sign at the tails. Read on for the four-case history, the current firing, and why the ASF-era restructuring may have broken the a-priori feed-cost transmission.

LIVE CHART

STATE-CONDITIONAL EDGE

THE TAKEAWAY

THE REGIME MAP

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.

The historical pattern

THE TRACK RECORD

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.

The signal pulls daily CHIRPS satellite precipitation observations for the CHINA_HOG_BELT_NCP region (Shandong, Henan, Hebei, Anhui, northern Jiangsu — roughly 40 percent of China hog slaughter), computes a 30-day trailing mean, z-scores the result on a 1,260-day (5-year) rolling window with a 252-day minimum population, applies a sign flip so that dry conditions print positive, 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 0.6 (extreme). This page framing reads the signal as a feed-cost gauge for the restructured post-ASF Chinese hog industry.

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 01:53 PM ET