MURICO.com Forum

The CME Component on the - - -

8/8/14 kill dropped -1.15 to 119.32. That puts the QQQs at a 5.02 discount to the index and we are down to 4-days of data to come in before we get to cash settlement. The model shows that it now takes an average daily drop in the component of -1.43 to get the Index down to where the QQQs are trading. We have not had a daily drop that large for quite a while. Since 7/23/14 that average daily drop has been 0.96.

Maybe traders have now caused the QQQs to dip a little too low.

I had been wanting to sell QQQs on a rally. Now I'm thinking of buying this dip.

The six-day moving average carcass weight has now moved up to 213.79#. That's +10.34# yr/yr.

Last weeks kill fell short of projections from the last H&P report by nearly 43K. The total short-fall since 6/1/14 has now moved up to 515K. If the last H&P report was quite accurate, then it is possible that producers have about 515K of heavy hogs who will need to keep their appointment with the packing plants just as the fall kill rate begins to come to market. I don't feel comfortable being long the VVVs but having a few Q/V spreads does not scare me too badly.

Best wishes,

dhm