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The CME Lean Hog Index component on the kill for -

8/12/19 was down -1.26 to 80.23. The QQQs are now trading discount to the component by -1.35. The model calculates that the component will need to drop an average of -1.01 per dy to close that "Gap". Packers seem to be serious about getting their cost of pork down. Not wanting to stand in front of a freight train headed south, I sold all long QQQs this morning and an now working orders to get short.

The 6-day moving average carcass weight eased to 207.97# That is -0.46# yr/yr. Index hogs were also a bit lighter at 208.65#. Packer hogs are lighter than non-packer hogs by -1.16#. Packers are really hurrying their hogs to market. The 6-day moving average percentage of packer hogs in the kill mix has moved up to 43.2%. I think this may be foretelling us that the price of hogs is headed downhill and packers want to process their hogs before it happens.

Best wishes,

Doc