12/18/17 was down -0.29 to 62.52. The GGGs settled premium to the component by +4.38 last night. Cutouts have been taking quite a beating lately but they stabilized yesterday and tacked on 0.41 moving them up to 76.70. One year ago they were at 75.53 and the GGGs were at 64.00. That was a premium of 5.82 over the index last year. One year ago the GGGs rallied and went to cash settlement at 75.31.
Pork production this year is up from last year and the above numbers suggest that the combination of increased demand and inflation are keeping the price of pork comparable to last year in the face of increased production.
The six-day moving average carcass weight eased quite a bit on the 12/18/17 kill dropping to 213.95#. That is +2.85# year/year. Index hogs were also lighter at 213.95#. Packer hogs were lighter by 0.60#d and non-packer hogs dipped by 0.98#. That is a significant drop on a 6-day moving average. Packer hogs are now +0.99# heavier than non-packer hogs.
I'm asking myself, "Are these numbers suggesting that the high kill rate of the past few weeks has brought the producers more current in their shipments thus the lower carcass weights?"
If that is the case, I suppose we could see the GGGs rally as much over the next eight weeks as they rallied last year. It is not unusual for the season low for the GGGs to be posted about this time of the year.
The following is a list by year of the change in the price of the GGGs from now until cash settlement:
2012 +3.09
2013 +1.55
2014 +0.20
2015 -19.93
2016 +9.47
2017 +9.31
A number of years ago Morris who was 79 went to see his physician. A few days later the doctor say Morris walking down the street with gorgeous young chick on his arm.
When the doc say Morris the next time he said to Morris, "I see you are doing all right!"
And Morris said, "Doing just what you told me, Doc, 'Get a hot momma and be cheerful."
To which the doctor replied, "I said you've got a heart murmur be careful!"
And so relative to the GGGs I say, "If you trade GGGs be careful."
The report Friday may help us out a little.
Best wishes,
dhm
!