MURICO.com Forum

The afternoon Purchase Index for - - -

8/13/19 was down -0.62 and the model projects the component on yesterday's kill will drop between -0.50 and -0.80. The QQQs settled discount to the component by -1.35. The model calculates that the component will need to drop by -0.91 o close that "Gap". Over the past 7-days it has dropped an average of 0.66 per day. The model calculates packers' margins are $18.63 per hog. That is probably enough to keep them quite willing to buy hogs even though there was a little weakness in the cutouts yesterday.

Yesterday packers purchased 106.2% of the moving average daily purchases of total hogs and 97.3% on the index hogs. The data seems to show that packers are very current in the shipments of their hogs so they may be a little more willing to buy hogs for a few day. The kill so far this week has me wondering if the supply of market ready hogs is becoming just a tiny bit tight. The six-day moving average carcass weight is below last year giving us a hint that producers are very current in their shipments.

Best wishes,

Doc