MURICO.com Forum

The final Purchase Index for - - -

5/24/19 was down -0.89 and the model projects the component on Friday's kill will drio between -030 and -0.60. Packers are trying to fix their margin problem. They have a ways to go befoe it is fixed. Traders are now recognizing that fact and are taking the MMMs, NNNs and QQQs lower. The MMMs are trading premium to the component by 1.35. Traders are coming to realize that packers' margins are a problem that will drive the Index down. The summer 2020 futures are bucking the down trend and holding up.

With their lower bids, packers purchased 107.9% of the daily moving average purchases of total hogs and 113.7% on the index hogs.

The actual kill since 3/1/19 exceeds the estimated kill suggesting that the USDA over-estimated the hog inventory or else hogs have been pulled forward or maybe a little of both. Either way it is a good sign.

Still short the MMMs and sold the last long NNN when the moved up a bit this morning.

Best wishes,

Doc