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The CME Lean Hog Index component on the kill for -

5/22/18 was up 0.36 to 69.21. The move up by the MMMs has opened the "Gap" to 5.64 with the MMMs premium to the component. The model is showing that it takes an average daily gain of +0.373 for the next fifteen trading days to close that "Gap". On average over the past 11-years we have not seen that much strength but in 2013 packers were wanting hogs so badly that they pumped the component up an average of 1.20 during that time period. That was some bull run we had that year!

That was then and this is now.

Is this going to be another 2013?

I don't think so!! Only once this year has the component gained more than 1.20 and many would be needed to give an average of 1.20.

The 6-day moving average carcass weight eased to 213.06#. That is +2.58# yr/yr. Index hogs were a bit lighter at 212.24#. Packers are bringing their hogs to market +2.45# heavier than the non-packer hogs. Packers may be getting more current in their shipments. On 5/10/18 packer hogs were +4.07# heavier. So the higher percentage of packer hogs in the kill-mix may be getting packers more current in their shipments.

Over the past 200-days packer hogs have made up 32.98% of the kill but over the past six-day it has been 34..5% so packers are still shipping a higher than usual percentage of the kill. I'm still trying to figure out whether packers have expanded their production or whether they merely delayed shipping to meet the summer demand. My best guess is that packers are continuing to vertically integrate a bit more.

I'm still short the MMMs and actually added more today. I hope I am not shaping up for a trip out behind te wood shed.

"In the hog market you can always expect the unexpected." Long Bear

Best wishes,

dhm

Messages In This Thread

The CME Lean Hog Index component on the kill for -
Re: DH, I don't want to see------
You had it right, ITZ, when you - - -
Re: The CME Lean Hog Index component on the kill f
Thanks for sharing the e-Mail you had - - -