MURICO.com Forum

The final Purchase Index for - - -

1/22/2020 was up +0.30 and the model projects the component on yesterday's kill will move up between +0.15 and +0.45. The GGGs are now trading premium to the component by +7.04. The model calculates that the component will need to tack on an average of +0.47 per day from now until cash settlement to close that "Gap". The CME Lean Hog Index does not seem to be on quite that strong of an upward trajectory at this point. So I am short GGGs and I might add, "And wrong!"

To be sure, I am expecting the Index to make a significant move upward; it just that it doesn't seem to be moving up that quickly now. Of course a few more boat-loads of pork heading for China could change things in a hurry.

An by the time summer gets here, I expect that to happen!

With their firm bids packers purchased 96.3% of the moving average daily purchases of total hogs and 109.8% on the Index hogs.

Best wishes,

Doc