6/11/18 was up 1.41 to 77.89. The MMMs are now trading premium to the component by 2.51. The model calculates that the component needs to gain 1.02 per day to close that "Gap". The average gain for the past 5-days has been 1.02. The up-trend may be strong enough to close the "Gap" and it is conceivable that the up-trend could be strong enough to nudge the MMMs up a bit.

The 6-day moving average carcass weight fell to 209.97#. That is +0.72# yr/yr. The 6-day moving average of Packer hogs dropped -1.02#. That is a very large one-day drop on a moving average. Packer hogs are now only +0.86# heavier than the non-packer hogs. The weight of non-packer hogs dipped by slightly more than 1/2#.

For the past 200-days packer hogs have comprised 33.02% of the kill but for the last six-days packer hogs have been 35.30% of the kill. It is now clear that packers were holding their hogs and letting them finish to heavier weights so they could process then when the supply of hogs was short and prices higher. Now packers are getting significantly more current in their shipments. Warmer weather is undoubtedly slowing down the weight gain of hogs.

I'm suspecting that packers survey their major suppliers and know far better than I about the supply of market hogs in the pipeline. I have been focusing more and more on trying to discern what packers were doing and the numbers were telling me that packers were retaining hogs for heavier and heavier weights. However I was unsure whether it was to process heavier hogs or to provide more pork when prices were higher. It is now clear packers were wanting to augment the supply of pork when the kill rate dropped and prices moved higher.

Best wishes,

dhm