MURICO.com Forum

The CME Lean Hog Index component on the kill for -

6/4/18 was up just +0.40 to 71.98. The MMMs are trading premium to the component by 4.89 with eight more days of data to get us to cash settlement. The model calculates that it will take and average daily gain of +0.68 to close that "Gap". Since the MMMs became front month, the average daily gain of the component has been +0.458. If that rate continues the cash settlement index will be 75.42. For the "Gap" to be closed entirely by the index moving up, the component needs to gain an average of +0.68 per day. The index IS trending upward but it doesn't seem to be quite at the pace needed to close the "Gap".

The six-day moving average carcass weight eased to 211.83#. That is +1.17# yr/yr. Packer hogs are +3.26# heavier than non-packer hogs. Index hogs are lighter at 210.92#.Today packer hogs were down +1.11# and non-packer hogs dropped -0.67#. It appears that packers are going to their barns to fill out the daily kill and it is dropping the weight of packer hogs. The data seems to be saying that the supply of market ready hogs is declining,

Over the past 200-days packer hogs have made up 33.0% of the kill. For the past 6-days the percentage has been 34.08%. This larger percentage of packer hogs being killed may be getting the packers more current in their shipments but they are still finishing their hogs to heavier weights.

I have been scalping in and out of the MMMs but as still quite short.

Best wishes,

dhm