Commodities Going Hog Wild as Pig Contracts Fly

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The hottest trade, at least in the commodity markets, is shaping up to be live hog futures.

Thanks both to a free-falling metals complex and the Smithfield Foods deal, traders looking for a good commodities play have stampeded to hogs.

Live hog prices have surged 18 percent year-to-date and about 40 percent since bottoming out in late March.

That ascent has come while metals, such as gold and silver, have been in free fall, with the former dropping nearly 30 percent and tumbling below $1,200 for the first time in nearly three years.

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"Investors are not abandoning commodity futures at every juncture," Andrew Wilkinson, chief economic strategist at Miller Tabak, said in a note. "Rising beef prices have made pork a more attractive alternative and at one point lifting the contract price to its highest in two years."

China's Shuanghui International's pending $4.7 billion deal to take over Smithfield Foods is also helping to elevate hog futures. Though some in Congress said they have regulatory issues, hog prices rose after the May 29 announcement of the deal.

At the same time, commodities have been on a strong downtrend, with the Dow Jones Commodity Index down 9 percent for the year.

(Read More: I Really Like Stocks, Gold at Its Worst: Gartman)

The movement in hogs has pushed the market value to $12 billion, excluding options, matching silver and surpassing the cattle market for the first time ever.

Broadly speaking, the commodities trade has been hit by a struggling global economy and uncertainty over Federal Reserve policy. Fed Chairman Ben Bernanke indicated last week that the central bank will be pulling back on its $85 billion a month bond-buying program if current economic trends continue.

The Fed's quantitative easing has helped keep dollar values in check, which in turn helped boost commodity prices. As that trade unwinds, analysts have speculated that the so-called commodity supercycle is coming to a close.

Investors, then, will need to be selective in the space, and the hog trade could continue to run wild.

—By CNBC's Jeff Cox. Follow him @JeffCoxCNBCcom on Twitter.