411/15/ was down -1.17 to 58.85. The ZZZs settled premium to the component by +3.90. The model calculates that packers' gross margins have risen to $65.33/index hog. If that is not a record, it gets mighty close to it. When the 710 report came out, last week's kill was revised upward to 2.755 million. The number of negotiated hogs in the kill mix on Friday was huge at 24,781. The large number of less expensive negotiated hogs in the kill mix was THE factor that caused the component on Friday's kill to take such a drastic dive.

The 6-day moving average carcass weight firmed to 215.87#. That is +2.44# yr/yr. Index hogs were heavier at 215.51#. Packer hogs are heavier than non-packer hogs by +0.61#. The percentage of packer hogs in the kill mix has now fallen to the 39% level from the 40% level a couple of weeks ago.

From the afternoon reports the model projects the Purchase Index will be up +0.46 and the component on today's kill will show a tad of strength perhaps being up +0.10 to +0.40. With their higher bids, packers purchased 114.0% of the moving average daily purchases of total hogs and 122.5% on the index hogs. Those are high numbers for a Monday.

Like you all, I am trying to figure out the intrigue that is going on in the hog market right now.

During the first four days of last week packers were bidding negotiated hogs lower and lower and killing only modest numbers of negotiated hogs then on Friday they killed a boat load of negotiated hogs and dropped the component on Friday's kill an unusually large amount and I ask myself, "Why?"

Packer owned hogs had been making up around 40% of the kill mix now the trend is reversing and packer hogs have fallen to the 39% level and I ask myself, "Why?"

On 11/1/19 packer hogs were weighing about 213.90# and were -0.68# lighter than the non-packer hogs but by 11/15/19 packer hogs were up to 215.91# and packer hogs were +0.81# heavier than the non-packer hogs and again I ask myself, "Why are packers holding back their hogs and letting their weights go up and killing a few more non-packer hogs?"

This I know - packers have a better handle on pork supply/demand factors than you or I have so I wonder, "Why have packers seemingly been holding back on killing their hogs the past couple of weeks and concentrated on killing more non-packer owed hogs while their hogs get heavier?"

Is it possible that packers accumulated a substantial inventory of purchased negotiated hogs and held them back to kill on Friday so that the component on Friday's kill would take a dive and scare the pants off producers causing them to hedge thinking the CME Lean Hog Index was headed lower in a hurry? And while producers were selling, were packers buying? If so, will we now see the number of negotiated hogs in the kill mix collapse causing the CME Lean Hog Index to rally forcing producers to cover their hedges and packers will have stripped producers of their margins??

Is it possible that packers have a feeling that the export market is opening up and they are holding their hogs back to sell at a higher price?

I don't have answers - but I do have numbers and I am just trying to figure out what they are telling us.

Best wishes,

Doc