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In the pop song of some years back of - - -

The Battle of New Orleans are these words, "We fires our guns and the British kept a comin".

The hog kill this spring reminds me of that - the hogs just keep a comin!

There were several days last week when the scheduled numbers were down and I wondered, "Have producers pulled hogs forward so much that we now have a hole?"

The answer is, "Nope!"

Last weeks pork production was +8.3% over the same week last year and the kill was +9.69% over the same week last year. This week is starting out at a brisk rate with yesterday's kill being 24.71% over the same Monday last year. Packers has 13.84% more hogs scheduled than on the same date last year.

We kill a bunch of hogs and the hogs just keep a comin!

It appears to me that traders are of the opinion that either:

a) The supply of hogs is going to rapid decline or

b) Unusually strong demand is about to surface

Otherwise why would they have the MMMs bid premium to the CME Lean Hog Index component by nearly 14 points.

Sometimes the Index gains that much between now and the MMMs going to cash settlement.

In fact just last year the Index tacked on 20.07 in that time frame. But in 2010 it dropped -10.61. I see a very high probability that we are going to be on a wild ride over the next six weeks as the bulls and bears battle over the supply/demand riddle.

My bias is (based on the data that continues to come in) that supply will continue to be a burden on in the near term. In all likelihood we will see the usual pre-holiday bounce in front of Memorial Day followed by a little weakness.

In the event each of the billion plus Chinese want an extra slice of bacon for the May Day celebration there could be an extreme surge in demand.

Best wishes,

dhm

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This is certainly not the momentum
In the pop song of some years back of - - -