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The CME Lean Hog Index component on the kill for -

9/17/19 was down -0.61 to 56.46. The VVVs settled premium to the component by +6.47. That is quite a bit of "Gap" and it will take strong exports to move the index up to close it; otherwise it will be closed by the VVVs slipping down hill a little. So far the exports are not showing up. Packers ended the day taking -0.10 less for the pork they sold but with the lower component, their gross margin on the Index hogs firmed to $24.44/Index hog. That does not send packers out chasing hogs but it may slow down the rate that they bid lower for the hogs they purchase.

FRom the afternoon reports the model projects the component on Wednesday's kill will drop between -0.30 and -0.60. We are still searching for the low to this seasonality. "The Market" is saying it will be posted sometime between now and when the VVVs go to cash settlement. That will be a bit earlier than usual but later than the 9/3/18 that we got last year.

Carcass weights were steady today at 210.85#. That is +2.10# yr/yr. Not only are the hogs heavier but there are lots of them. So far this week the kill is running 15.20% larger than the same period last year. Shortly cool weather will hit and fresh corn will show up in the feeders. That's when hogs will grow like crazy. Let's just hope by then Trump and Xi have become bosom buddies and lots of pork heads west.

I sold the pair of VVVs I targeted Wednesday morning and had them on and off my boat a couple of times. Two are still there hoping for more down draft tomorrow. Calendar spread activity has slowed now that the Goldman Roll is over but there was a little activity that I appreciated with some long Q/V spreads reaching my profit target.

Best wishes,

Doc