is a two-step calculation. The first step is to calculate the daily component for two consecutive days and the second step is to average the two components. For example, the component on the kill for 8/7/19 was 82.564 and the component on the 8/8/19 kill was 82.095. When these two numbers are averaged the Index for 8/7/19 becomes 82.32.

The calculation of the components is is quite a bit more involved. It is calculated from the number of hogs processed that were purchased on a negotiated basis AND the hogs purchased under the Swine or Pork Market Formula. These numbers are weighted according to their weight and the price paid. When the formula is set-up in an Excel spreadsheet, it become a very simple calculation. This is explained more clearly on the CME website.

As you can see, the cutouts are not a factor in calculating the CME Lean Hog Index.

Best wishes,

dhm