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The final Purchase Index for - - -

10/1/14 was DOWN $0.30 and the model projects that the CME INDEX component of the 10-1-14 kill will be between unchanged and +0.30. Packers are sitting on a nice inventory of higher priced hogs that may keep the component firm for another day or two.

Packers were able to round up 99.0% of the weekly moving average daily purchase of index hogs with their lower purchasing prices yesterday. This suggests that producers are fairly willing sellers of hogs.

The VVVs are discounted to the Index component by 2.99 with 9-days until we get to cash settlement. That's one good day of market action to close that.

I had thought that the data was telling me that the Index might hold fairly firm for a week or so but the traders think otherwise so I was stopped out of the long VVVs I had. I think sometimes it is the packers who are the big players in the futures market and they have a better handle on the supply/demand situation than I so I have learned that I have to listen to the market as well as look at the data.

From the data I get the impression that the supply of hogs is a bit tight thus setting the stage for firmness in the index for a week or so but I couldn't fight the down trend that may be developing with the Purchase Index showing some weakness.

Best wishes,

dhm

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The final Purchase Index for - - -
Re: The final Purchase Index for - - -
Historically, Dewey, bearish is the way to - -