MURICO.com Forum

The final Purchase Index for - - -

11/15/19 was up +1.40 due to the strength in some the Swine Formula markets. Negotiated hogs were mostly down again. The model projects the component on Friday's kill will be up between +0.05 and +0.35. This is a very difficult market to project with world supplies short, U.S.A. production at record level and a trade war that stifles exports. The data suggests that packers are really doing well with the model calculating their gross margins were $60.37/index hog on Friday. I have not had my model programed to calculate packers gross margins very long but surely, we must be near record levels.

With their higher bids on Friday, packers were able to purchase 130.3% of the moving daily average of total hog purchases and 154.2% on the Index hogs. Producers were willing sellers on Friday and packers seemed to have been wanting hogs.

The weakness in the hog futures today seems to be out of harmony with the strength in the Purchase Index this morning so I piled another long NNN pig onto my boat at 88.75. I keep piling on summer futures looking for a bounce and I may be risking swamping my boat. I did take profits on three V/Z spreads and two Z19/G20 spreads this morning so that may cushion the draw-down a tiny bit.

Best wishes,

Doc