Cutouts were down another -2.21 to 82.62 and the component on the 5/22/19 kill was at 84.28 meaning packers were losing -$3.55 on the index hogs they were killing. Surely there are some grouchy packers out there and they will not continue to live with numbers like that. The MMMs settled premium to the component by +5.15 so traders are thinking that packers are going to be bidding higher over the next couple of weeks - and they might but they really need some help in selling the product.

The 6-day moving average carcass weight was steady yesterday at 214.55#. That is +1.62# yr/yr. Index hogs were a bit heavier at 213.81# but still below the rest of the hogs. Packer hogs were +2.06# heavier than the non-packer hogs. Packers are becoming much more current in their shipments.

When the afternoon reports came out yesterday, it showed that packers were bidding a little higher with a projected Purchase Index of +0.15, The model projects the component on yesgterday's kill with change in the range of +0.10 and -0.20. By the time the afternoon reports were released, packers had purchased 86.8% of the moving daily average purchases of total hogs and 90.7% on the index hogs. These are about average numbers for a Thursday.

This is a crazy, wild hog market and I don't know where we are headed in the in the near term but there is still a seasonality high to be posted unless it was hit on 5/17/19 when the Index touched 84.59 but that still would need to be confirmed. I doubt very much that that is a Hog Cycle high. Still too many people in China loving pork and they are not producing it. So I am short the MMMs and long the summer 2020 futures. Maybe I am right and maybe I am wrong. Hopefully the boat load of calendar spreads will save me if I am wrong.

Best wishes,

Doc