· Analytic
LC China NCP Hog-Belt Severe Heat
A monthly climatology z-score on China’s forty-percent-of-national-slaughter hog region, read against US fed-cattle forward prices.
At a glance
Current reading
-0.676
moderate-negative band, cool-fall NCP conditions
Signal state
Moderate NEG
phase -1, 12 trading days in state
36-year sample
8,986 observable fwd60d days
1990-11-29 to Oct 30, 2026
Historical IC vs LC
-0.0395
Spearman vs LC fwd60d, p = 0.0002 (inverted vs engine a-priori)
Baseline LC fwd60d
+0.73%
Unconditional mean
Moderate-neg fwd60d
+2.29%
+1.56 pp above baseline, strongest LC band
As of Oct 30, 2026. Updated nightly.
OBJECTIVE
The North China Plain stretches across Shandong, Henan, Hebei, Anhui and northern Jiangsu. Together those five provinces produce roughly 40 percent of China pork slaughter. When daytime temperatures and humidity push past the 90 THI severe threshold for sustained stretches, Chinese sow productivity drops, finishing hogs get killed early, and Chinese spot pork prices spike. That has pulled US pork exports hard in prior major episodes. This signal counts severe-and-moderate stress days on a rolling 30-day window across the China NCP belt, z-scores the count on five years of history, and bounds the result between plus and minus one. In July 2013 the signal sat near plus 0.80 in extreme-positive heat accumulation and US pork export sales to China tripled year-over-year in the fourth quarter. In August August 2017 another extreme-positive reading at plus 0.90 preceded a 25 percent jump in US pork shipments to China that quarter. The memorable twist: those pork-complex episodes did not transmit to US live cattle. The 36-year sample shows the strongest LC forward return edge is actually in the moderate-cool China band, where LC runs plus 2.3 percent against a plus 0.7 percent baseline. US beef is a weak substitute for Chinese pork at the consumer level, so the China hog-belt signal reads mostly as a Northern Hemisphere livestock supply tempo gauge for LC, not as a direct substitution pull. Read on for the four-case history, the state the signal reads right now, and why LH and LC decouple during China-weather episodes.
LIVE CHART
LC China NCP Hog-Belt Severe Heat
Composite reads -0.676 as of October 30, 2026, in the moderate-negative band for China NCP severe-heat accumulation, 12 trading days running since October 15, 2026. The autumn cool-down across the North China Plain has reduced severe-day accumulation below trend. The historical state-conditional edge for this band is plus 1.56 pp above the plus 0.73 percent LC baseline, the strongest LC-conditional state in the sample.
COMPOSITE
-0.676 / tanh
STATE
Moderate NEG
PHASE
-1
LC FWD 60d
+2.29% (baseline +0.73%)
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 Neg
STATE AND HISTORY
Moderate-negative firing, 12 trading days running in cool-fall NCP conditions. State-conditional LC fwd60d mean is plus 2.29 percent, plus 1.56 pp above the plus 0.73 percent baseline.
CROSS-MARKET FINDING
Engine LH-native mechanism (China heat pulls US pork imports) does not transmit to LC. LC relationship with the signal is weakly inverted at the extreme-positive tail; strongest LC positive band is moderate-cool China (not severe-heat).
HOW TO POSITION
Constructive band on history for LC. Pair with US cattle-on-feed placements, feeder cattle marketings, and corn-belt pasture conditions for the full LC supply read.
WHAT THE CHART SHOWS
The composite sits at -0.676 in the moderate-negative band, 12 trading days running since October 15, 2026. The blue signal line has moved into cool-fall NCP territory. CME Live Cattle (orange) is trading around $221 cwt as the US cattle-cycle rebuild continues. The engine state-conditional edge for moderate-negative is plus 1.56 pp above the plus 0.73 percent LC baseline, the strongest LC-conditional band in the sample. The rolling IC pane shows the 252-day Spearman has drifted negative, consistent with the signal long-term IC sign.
TOP INPUTS FIRING
- Primary composite -0.676 State Moderate NEG; 12 trading days running since October 15, 2026.
- Raw z-score -0.82 30-day rolling count of severe-or-moderate stress days in the North China Plain hog belt, z-scored on a 5-year window with 60-day minimum.
- LC cross-market edge: +1.56 pp Moderate-negative historical LC fwd60d mean plus 2.29 percent, baseline plus 0.73 percent (edge plus 1.56 pp). Spearman IC vs LC minus 0.040 at h=60d. Strongest LC-conditional band in the sample at 6.2 percent of days.
THE TAKEAWAY
What this means for you today
THE CROSS-MARKET CALL
Composite -0.676, moderate-negative band for China NCP heat accumulation. Historical LC fwd60d edge in this band is plus 1.56 pp above baseline, the strongest LC-conditional state in the sample.
THE EMPIRICAL CONTEXT
Moderate-negative historically delivers mean fwd 60-day LC plus 2.29 percent, well above the plus 0.73 percent LC baseline. 6.2 percent of the sample sits in this band, so it is a relatively rare signal.
THE HONEST CAVEAT
Spearman IC against LC fwd60d is only minus 0.04 (small but significant); this is a modest cross-market lens, not a standalone sizing input. Pair with US cattle-cycle data for the full LC read.
THE REGIME MAP
The five states, forward LC returns and sample share
Computed from 8,986 trading days with observable LC fwd60d. Baseline LC fwd60d (unconditional): plus 0.726 percent mean, plus 0.80 percent median, 5.52 percent standard deviation, 42.7 percent negative.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Severe NCP Heat (extreme-pos) | +1 | 33.2% (2983 d) | +0.28% | +2.6 | -0.45 pp | 2013 summer, 2017 summer, 2022 summer |
| Moderate Positive | +1 | 4.5% (401 d) | +0.68% | +2.6 | -0.04 pp | Shoulder season transitions |
| Normal | 0 | 6.0% (541 d) | +1.52% | +7.1 | +0.79 pp | Spring and fall transitions |
| Moderate Negative TODAY | -1 | 6.2% (557 d) | +2.29% | +10.2 | +1.56 pp | 2026 Q4 (current) |
| Cool NCP Conditions (extreme-neg) | -1 | 50.1% (4504 d) | +0.54% | +6.4 | -0.19 pp | 2015 fall, 2019 winter, non-summer |
The historical pattern
Signature episodes in the 36-year sample
THE TRACK RECORD
State changes
| State | Start | End | Duration | Fwd 60d LC |
|---|---|---|---|---|
| Extreme Neg | 10/30/2024 | 04/29/2025 | 124d | +3.76% |
| Normal | 04/30/2025 | 05/21/2025 | 16d | +14.86% |
| Extreme Pos | 05/22/2025 | 05/22/2025 | 1d | +9.73% |
| Normal | 05/23/2025 | 05/27/2025 | 2d | +10.19% |
| Extreme Pos | 05/28/2025 | 09/26/2025 | 85d | +9.80% |
| Normal | 09/29/2025 | 10/03/2025 | 5d | +3.66% |
| Extreme Neg | 10/06/2025 | 05/11/2026 | 150d | +1.54% |
| Normal | 05/12/2026 | 05/22/2026 | 9d | +4.75% |
| Extreme Pos | 05/26/2026 | 10/01/2026 | 90d | +1.60% |
| Normal | 10/02/2026 | 10/14/2026 | 9d | |
| Extreme Neg | 10/15/2026 | 10/30/2026 | 12d |
Scroll inside the table for the full history. Forward 60-day LC 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 daily temperature-humidity-index observations for the North China Plain hog-production belt (Shandong, Henan, Hebei, Anhui, northern Jiangsu), flags each day as severe (THI above 90) or moderate stress based on the livestock-stress threshold, counts stress days on a rolling 30-day window, z-scores the count on a 1,260-day (5-year) rolling window with a 60-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 0.6 (extreme). This page shows the cross-market read against CME Live Cattle forward returns.
Why it matters
Why China hog-belt heat is in the LC conversation
The North China Plain carries roughly 40 percent of China pork slaughter and sustained severe heat episodes measurably disrupt that supply. In 2013, 2017, and 2022 those episodes pulled US pork exports to China hard, firming US pork cutout prices. The question for the US beef complex: do those China-pork episodes transmit to US fed cattle forward prices through protein-complex substitution, foodservice basket pricing, or cold-storage inventory tempo? The 36-year test says the correlation is weak at the full-sample level and inverted at the extreme-positive tail.
Why LH and LC decouple during China-weather episodes
US beef is a weak substitute for Chinese pork at the consumer level. Chinese consumers who face spot pork price spikes buy more poultry and chicken-based protein first, with imports of US pork absorbing the second-order demand gap. US beef does not enter that substitution chain. On the US side, LC price formation is dominated by the cattle cycle (cattle-on-feed placements, heifer retention, pasture conditions) and consumer-side beef demand. The 2017 case is the clearest: severe NCP heat into LH strength, LC into a 4.3 percent 60-day decline on heavy COF placements.
How to use this signal today
Treat as a Northern Hemisphere livestock supply tempo gauge, not a direct cross-market trigger. The current moderate-negative firing is historically constructive for LC fwd60d (plus 1.56 pp above baseline), but the Spearman IC is only minus 0.04, so the state-conditional edge is noisier than LC native drivers. Pair with the Cattle on Feed monthly report, Feeder Cattle index, and corn-belt pasture conditions for the full LC supply read. Half-life approximately 45 trading days given the 30-day rolling input.
GO DEEPER
Want the full depth?
The research brief walks through 36 years of North China Plain hog-belt THI stress-day accumulation vs CME Live Cattle forward returns, documents the cross-market finding that engine mechanism (severe China heat pulling US pork imports) does not transmit cleanly to LC, and sets out why moderate-cool NCP readings are the strongest LC-conditional band.
Related signals
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