7/3/19 was down -0.34 to 73.07. The NNNs are now trading premium to the component by +0.48. Cutouts dropped -1.73 with every primal cut being down. Usually one of the cuts will buck the trend and be up, but this time they were all down. Yesterday packers paid $3.36 per hog more for the pork than they sold it and their operating costs of salaries, utilities, etc. etc. were additional costs. Index hogs make up about 25% of the kill. If packers have long-term sales contracts in place for the other 75% of production, they are probably all right but the financial incentive to bid higher for the index hogs is just not there.

The 6-day moving average carcass weight eased to 211.7#. That is +4.06# yr/yr. Carcass weights seem to be dropping and I am suspecting it is from the hot weather slowing hog growth rather than falling number of hogs. Index hogs were also lighter at 211.54#. Packer hogs are now -0.52# lighter than the non-packer hogs. Packers have done a very good job getting current in their shipments. The crumbling index and cutouts has me thinking the NNNs will head lower but it isn't happening so the short NNNs I have piled on my boat are becoming a concern.

Best wishes,

Doc