MURICO.com Forum

The final Purchase Index for - - -

12/8/17 was down -0.32 and the model projects that the component of Friday's kill will change in the range of +0.15 to -0.15. In other words it will be essentially unchanged. The ZZZs are now trading discount to the component by -1.47. The ZZZs may be pushed up a little by the index by the time we get to cash settlement.

Packers made a very large hog purchase Friday at 137.6% of the moving average daily purchases. Packers had a big appetite for hogs and producers were willing to step up and sell at a slightly lower bid. It carcass weights are coming in firm and I think this means that producers are a bit behind in their shipments and are going to be willing sellers.

Historically there tends to be a little firmness in packers bids in front of the holidays. This is a reflection of firm demand but there is risk that this demand will not hold once we get through the holiday season. If it does, it will most likely be because of export demand.

I am staying long a few ZZZs to take to cash settlement and I have sold a little call premium that I have covered with long ZZZs.

Best wishes,

dhm.