MURICO.com Forum

The six-day moving average carcass weight - - -

today is 214.51#. That is nearly unchanged and -1.03# year/year. It is +6.35# over 2013. Producers have liquidated a bunch of heavies but they still may have an ample supply of market-ready and near-market-ready hogs. I say that because the number of hogs scheduled for delivery is not +14.08% greater than the same date last year and 146K greater than the same date last week.

It is no longer a question of whether or not we are in the expansion phase of the hog cycle. But unanswered are the questions of:

-) How high will production go and how soon?

-) How is demand going to respond to this increase in product?

-) Will there be a severe liquidation phase and if so, when?

The fact that the Hogs and Pigs report shows the June through August farrowings down 2.0% from 2014 suggests that producers are wary of over expansion. If pigs per litter continues to be strong, pork production may continue to expand if carcass weights continue to be at the 215# level. There are really no problems with a heavy carcass that a sharp knife can't solve and it is more efficient for packers to produce pork from heavy hogs.

Today there seems to be a little agreement among traders that KKKs should not be discounted to the JJJs by nearly 8.0 points. Something like 3.0 points seems to be more appropriate to me.

Best wishes,

dhm