MURICO.com Forum

The CME component on the kill for - - -

5/11/15 was up +1.30 to 79.76. That has closed the premium of the KKKs over the component to 1.37 with three days of data to get us to cash settlement. The model shows that a daily component gain of 0.61 will close the "Gap".

From the noon reports the model is projecting that the component on today's kill will be up between +0.75 and 1.00 and the cash settlement price for the KKKs will be 81.64 with a range of 81.14 to 82.14. I just went to the bank with three long KKKs but have enough left to make Dewey proud of me. If the KKKs rally to the projected cash settlement price, I will cash in some more; otherwise I may stay long and take them to cash settlement.

The 6-day moving average carcass weight tumbled to 213.00#. That is down 3.20# from the same date last year. Both packer hogs and non-packer hogs were down but packer hogs were down more.

The swine scheduled for delivery report shows that packer have only 2.92% more hogs scheduled than they had on this date one-year ago. The declining carcass weights and the smaller-than-projected scheduled numbers makes me think that producers have pulled hogs forward so they are very, very current in their shipments. With the MMMs coming alive this afternoon, I am plenty happy that I have spread a bunch of long KKKs over the top of the long K/M spreads.

Best wishes,

dhm