MURICO.com Forum

The final Purchase Index for - - -

8/13/15 was down -$0.11 and the model projects that the change in the CME Lean Hog Index component on the 8/13/15 kill will fall in the range of +0.15 to -0.15. This component will represent 50% of the cash settlement index for the QQQs. Say we get the 0.15 jump on yesterday's kill; that will put the component for yesterday at 78.56. In order to for the cash settlement index to move up to the QQQs at 79.05, the component on today's kill will need to jump by a buck. My bet is that "it'll nevah h'oppen" so I sold a handful of QQQs this morning. If they pop a little higher, I will sell more. Sometimes people know something I don't know and I take a thrashing. I hope this is not one of those times.

After all, packers made only a fair purchase yesterday at 87.6% of the moving average daily purchases. They may find themselves short-bought and have to come out today throwing money at hogs. Cutouts were a bit weak yesterday but packers' margins are fairly good right now so they may have the where-with to bid higher.

The weather is quite warm but hogs seem to be gaining quite well. I say that because the 6-day moving average carcass weight is holding firm. Yesterday it was 209.74#. That is nearly unchanged in the last two weeks.

Best wishes,

dhm