6/6/19 was down -0.24 to 80.18.. The MMMs settled discount to the component by -1.53. Obviously "The Market" thinks the CME Lean Hog Index is headed lower. Furthermore it is saying that the "High" for this seasonality cycle was hit on 5/17/19 when the Index touched 84.59 and the low will be 76.65 about the time the ZZZs expire in December. Last year the seasonality high was posted on 6/22/18 at 86.2 and the low was posted on 9/3/18 at 45.30. You and I both know that the hog market can be very fickle and often changes its mind in a hurry. There is a very big unknown fundamental we are facing this year - how is China going to react to the shortage of pork they= will experience as a result of the ASF epidemic?

The fact that they have banned imports from Canada tells us that with them politics and power is more important thanpeople and products.

The 6-day moving average carcass weight was steady at 215.46#. That is +4.48# heavier than one-year ago. Index hogs were also steady at 215.58#. Packer hogs were heavier than the non-packer hogs by +1.12#. I keep watching the carcass weights trying to figure out the significance. Here are some observations I have made:

- Packers are wanting to kill and process heavier hogs and have led the way in running up the weight of their hogs.

- The weight of packer hogs has declined from over 217# at the beginning of the year to less than 216# currently suggesting that packers have become quite a bit more current in their shipments.

- The weight of non-packer hogs has been relatively stable near the 215# level suggesting they are marketing their hogs about as fast as they finish.

- The weight of Index hogs has been increasing lately until they are almost as heavy as total hogs suggesting they are falling behind in their shipments.

- The six-day moving average carcass weight is relatively unchanged since the beginning of the year. Usually there is a two to three pound decline from January to June.

CONCLUSION:

Since 3/1/19 the kill has been about 490K greater than projected from the last H&P report. The carcass weight numbers strongly suggest that the USDA underestimated the inventory of hogs at 3/1/19 and it is the packer segment that has expanded,

Best wishes,

Doc