MURICO.com Forum

The CME Lean Hog Index component on the kill for -

6/6/18 up 0.97 to 73.98. The MMMs are now trading premium to the component by 4.52 and it takes an average daily component gain of 0.84 to close that "Gap". On average over the past 11-years the component has not made gains like that but some years it has gained far more than that. It appears that I have made quite a mistake in doing the "Gap" closing waltz with Miss Short!

The six-day moving average carcass weight eased to 211.21#. That is +0.97# yr/yr. Index hogs were lighter at 210.38#. Packer hogs were heavier than the non-packer hogs by +2.48#. Packer hogs were down -1/3# and non-packer hogs were down -1/4#. The lighter carcass weights suggest that producers are getting very current in their shipments and hogs grow more slowly in hot weather.

Over the past 200-days packer hogs have made up 32.99% of the kill but for the past 6-days packer hogs have been 34.28% of the kill. Even though packers have expanded production and are finishing their hogs to heavier weights, they are having to bid aggressively to see who gets to kill the tightening supply of hogs. This is the seasonal pattern of higher hog prices leading up to the Independence Day holiday. Perhaps packers are long the MMMs since they know their kill needs.

Three V/Z spreads I bought yesterday met my profit objective today so I unloaded my boat.

Best wishes,

dhm