MURICO.com Forum

The afternoon Purchase Index for - - -

7/22/19 was up a measly +0.06 and the model projects the component on Monday's kill will jump between +0.10 and +0.40. Packers still have a fair sized inventory of more expensive hogs purchased that will most likely be supportive of the component on Monday's kill.

The big news for the day is the fact that cutouts soared by +2.08! That's a B I G deal to see demand sufficiently strong to bump the primal cuts up that much in one day. I don't know what was pushing demand enough to enable packers to get that much more out of the pork, but it does give packers a lot more jingle in their pockets to throw at hogs.

When the final numbers came in for last weeks kill, it was actually down for the week -3.62% below the same week last year. The kill rate lately is coming in surprisingly weak and not only is it weak, but the carcass weights are falling off hinting of the possibility that hogs are being pulled forward. We need to watch this market very carefully and be nimble in what we do.

By the time the afternoon reports came out, packers had purchased 121.6% of the moving average daily purchases of total hogs and 121.6% on the index hogs. It appears they were making up for the lower-than-usual Friday purchases.

I piled two long QQQ pigs on my boat today. I have room for more if they dip further this week. The strength of the cutouts today may be hinting that demand is coming alive. If that happens, the seasonality high may come into play. I had been thinking that the high of 84.59 posted on 5/17/19 might be the high but the way the component has been jumping lately, a new high could be posted before the QQQs go to cash settlement.

Best wishes,

Doc