MURICO.com Forum

The CME Lean Hog Index component on the kill for -

1/20/2020 was up +0.98 to 60.70. The GGGs are now trading premium to the component by +6.63. The model calculates the component will need to gain an average of +0.41 to close that "Gap". On average over the past 6-years, from this date until cash settlement the index has gained +1.31. It did gain +9.12 in 2016 however in 2015 it lost -12.88. It is going to take a ot of exports to close the "Gap". I don't think it is going to happen so I am short some GGGs..

The six-day moving average carcass weight eased to 214.35#. That is +1.48# yr/yr. Index hogs were down a ittle at 214.35#. Packer hogs were heavier than the non-packer hogs by +2.51#. Packers are continuing to buy more hogs and hold theirs back to finish at heavier weights.

Cutouts gained +1.08 yesterday and the model calculates that packers' gross margins on index hogs is now $37.34 per hog. Not bad!

Hog futures are really quiet today.

Best wishes,

Doc