MURICO.com Forum

The CME Lean Hog Index component on the kill for -

7/19/19 was up +1.07 to 73.80. At more than a buck a day, a lot of "Gap" gets closed. The QQQs are now trading premium to the component by 8.60. Since the CME Lean Hog Index started on an up-trend four days ago, it has gained an average of 0.82/day. If that rate of gain would continue until cash settlement, the QQQs would go to cash settlement at 88.09.

The model calculates that the component needs to gain an average of 0.57 per day to close the "Gap". The trajectory the CME Lean Hog Index is now on suggests the chances of the Index going up fast enough to close the "Gap" and perhaps push the QQQs up a notch are quite good.

So-

I piled a long QQQ pig onto my boat this morning at 82.375. I will add more if they dip further.

The 6-day moving average carcass weight eased to 210.02#. That is +2.72# yr/yr. Index hogs were also lighter at 209.82#. The combination of a high kill rate and slower growth due to the hot weather is dropping carcass weights significantly. Packer hogs are now -0.23 # lighter than the non-packer hogs. At one point the packer hogs we moving toward being 5# heavier than the non-packer hogs. Packers have become much more current in their shipments and they are still shipping about 40% of the daily kill compared to about 33% one year ago.

Best wishes,

Doc