MURICO.com Forum

The final Purchase Index for - - -

2/12/2020 was down -0.21 and the model projects the component on yesterday's kill will drop between -0.40 and -0.70. The rate at which packers are slashing their bids for hogs seems to be slowing. The -0.21 today is the smallest daily decline the Purchase Index has shown since 1/29/2020.

In addition to the decline in the rate at which packers are lowering their bids, the kill yesterday dipped below 490K, the 6-day moving average carcass weight is now hovering around 216# down from 218.32# on 1/10/2020, cutouts were up 0.31 yesterday and the kill for the last three weeks has been very high suggesting there is a possibility hogs have been pulled forward a bit.

Near the end of the month the kill should begin coming from the 50# to 119# category of hogs. The last H&P Report pegged them at +1.69% compared to the 180# and up category at +6.68% and the 120# to 179# up 4.56%. If hogs have been pulled forward a little, we could see the kill rate ease somewhat before the end of the month and that could push the JJJs higher - but I am flat the JJJs. However I have sold quite a bit of April put premium using a fairly low risk option spread strategy.

Best wishes,

Doc