MURICO.com Forum

The CME Lean Hog Index component on the kill for -

8/16/18 was down -1.58 to 52.15. The VVVs are now trading premium to the component by +4.15. Earlier I mentioned packers buying futures now I say, "Why would they when they can buy hogs at bargain prices?"

I'm suspecting it is the African Swine Fever scare that has excited the speculators and caused a bunch of short covering. Packers are still bidding lower. The kill is still high. Cutouts are still drifting lower and this is the season when we are in the chase to find the seasonality low and we may be looking for a Hog Cycle low. The 52.15 component posted today has things set up to take out the previous index low of 52.97 set on 4/11/18. It really looks to me like we will be posting a Hog Cycle low on Monday and after that it is any body's guess how low it goes.

The six-day moving average carcass weight eased a bit to 208.26#. That is -0.72# yr/yr. Index hogs were also a bit lighter at 208.23#. Packer hogs are now lighter than non-packer hogs by -0.53#. It appears that packers are moving their hogs to market in front of the non-packers.

I am still holding onto the long summer futures for dear life (HODLing). I would like to buy more but not at this level but don't want to sell any either. I just went outside and listened. I didn't hear a little old man ringing a bell signaling the low has been hit for the CME Lean Hog Index for either the Hog Cycle or the fall seasonality.

So I wait for a dip and I HODL.

Best wishes,

dhm