The CME Lean Hog Index component on the kill for -

12/3/18 was up +0.07 to 56.43. The ZZZs settled premium to the component by +0.45. Packers were able to keep the price of the product steady to mildly firm due to good demand for loins and bellies.

The six-day moving average carcass weight eased to 213.93#. That is -1.08# year over year. Packer hogs are heavier than the non-packer hogs by +3.30#. Index hogs were a bit lighter at 213.14#. Packers are continuing to ship a larger percentage of the kill. Over the past six-days packer hogs have made up 36.0% of the kill mix. One year ago it was 34.18%. Packers are shipping a higher percentage of the kill and the hogs they are shipping are heavier so packers are producing an even higher percentage of the pork that is produced.

Historically -8.50 appears to be a low price for the Z/G spread so I have been scaling into the spread from the long side as it dips below that level and selling the rallies. Some days the volatility in that spread keeps me mighty busy loading and unloading my boat. Still long the summer futures and am buying the dips and selling the rallies.

Best wishes,