12/4/15 was down -0..05 to 56.37. The ZZZs are now trading discount to the component by -0.20. "The Market" is saying the index is fairly close to where we will go to cash settlement.
The six-day moving average carcass weight firmed to 214.07#. That is -1.09# year/year. Index hogs were also a bit heavier at 213.3# Packer hogs are heavier than the non-packer hogs by +2.98#. Packer's barns are full of heavy hogs and they are shipping them at a brisk clip.
When the Z/G spread firmed this morning I was selling and when it reversed I started loading my boat. I may have started to soon and added too many. At any rate, I have plenty to sell between now and 12/14/18 if we get a reversal. The other spreads and the summer futures are treating me better. Prior to this year, the lowest the Z/Gs had traded was -8.475 on 12/8/14. As I have said before, historicals don't matter. It is the supply/demand factors here and NOW! And "NOW" the market is saying the supply of pork is adequate and come February the hungry mouths of the world are going to be clamoring for American pork. Looking at the way packers are producing a lot of heavy hogs, one might conclude that is also the mind-set of the packers.