5/13/19 was down -0.05 and the model projects the component on yesterday's kill will change in the range of +0.15 to -0.15 and that is not much change. The MMMs settled premium to the component by a mere +3.47. The primal cuts made a nice move up today being up 2.08. Packers needed that!
Packers made a solid purchase of total hogs by the time the afternoon reports came out at 103.4% of the moving average daily purchases. They did not do quite as well with index hogs getting only 80.1%.701This evening i decided to look at the kill since 3/1/19 to see how it stacks up against the H&P report. The actual kill has been 26,756,969. The model projected the kill should have been 27,017,137 so the kill has been 260,168 less than projected since 3/1/19. This may mean that hogs have been backed up a little or that the last H&P Report missed or some combination of the two.
The six-day moving average carcass weight was running a bit below the 215# level when the H&P Report came out. It is now running a little above 215# At the time the report came out, carcass weights were about the same as last year. They are now running +1.06# heavier than one-year ago. Index hogs are also a bit heavier than they were when the H&P report came out.
The numbers seem to suggest that hogs may be backed up a little.
But -
The number of hogs backed up does not amount to a spit in the compared to the millions of hogs that may being lost in China due to the ASF epidemic but Trump and Xi need to get their ducks lined up if exports are to reach their potential. Without exports, an extra 1.0% of pork to be consumed by the domestic market could be problematic!
It does not seem logical that the trade war would go on and on and on forever. Surely there must be a deal that can be made and when it happens, exports could sky-rocket and the search for the "Crest" for this Hog Cycle could become mighty interesting. I bought two QQQ-2020s when they dipped today.
Limit for 5/14/19 is expanded to 4.50 so I could be facing a brutal shellacing.
Best wishes,
Doc