11/8/19 WAS down -1.44 to 58.81. The downtrend is getting to be so serious that the seasonality low may come into play. The low of 54.67 set on 9/24/19 has the markings of being the seasonality low but the collapse we are seeing in the CME Lean Hog Index needs to be watched because it is possible packers will keep cutting their bids. The model calculates that packers' margins on index hogs has now expanded to $49.81/index hog.
The six-day moving average carcass weight moved up to 215.41#. That is +2.12# yr/yr. Index hogs were also heavier at 214.11#. It might be that hogs are being finished a bit faster than they are being processed. This is not a good time of the year for producers to get behind in their shipments. Nor is it looking like this is a good time of the year for me to be long hog futures. World pork supplies seem to be tight but the challenge is matching up supply with demand in the face of geopolitical unrest. In the mean time, we bullish hog traders and American pork producers continue to suffer.
Best wishes,
Doc