MURICO.com Forum

The CME Lean Hog Index component on the kill for -

10/13/17 up +1.06 to 60.67 and that is 50% of the cash settlement index. When added to the 50% we already had, we end up with a cash settlement index of 60.24. Getting short with a bunch of VVVs gave me a nice payday because of the number sold and the sell prices which were mostly in the 60.85 to 61.25 range. Holding to cash settlement will add a little but less than expected because the component on Friday's kill was somewhat higher than the model projected. It is a BIG challenge to "Guess" which price level of hogs packers will choose to kill on a given day considering the inventory they have purchased. Generally the Hog Pricing Model does a fairly good job with its projections. I now goes into that dry period when it is too far from cash settlement to be very good.

I don't have fishing gear like ITZ so will depend on scalping with a trend line reversal strategy and the randomness of the price movement in the calendar spreads.

The six-day moving average carcass weight moved up to 210.91#. That is -0.14# year over year. I am impressed by the fact that there was some firmness in the carcass weights after the kill we had last week. The weather is great for finishing hogs right now do the numbers suggest that producers have ample hog numbers to meet packers needs? Packers are continuing to finish there hogs heavier at +0.58#. Does that mean they are wanting heavier weights because they want more pork? Looking at how well cutouts are holding up, packers are probably wanting the pork.

Best wishes,

dhm