MURICO.com Forum

The CME Lean Hog Index component on the kill for -

2/20/2020 was down -0.13 to 55.80. It looks like the JJJs are going to settle premium to the component by +11.20. I was expecting the hog futures to dip quite a bit more than they did today.

The 6-day moving average carcass weights firmed to 215.38#. That is -0.21# yr/yr. Maybe we are seeing the impact of the withdrawal of PayLean - whatever the reason, lighter hogs means lower pork production and also suggests that producers are current in their shipments. Index hogs were a bit lighter at 214.44# and packer hogs were +2.62# heavier than the non-packer hogs. Not long ago packer hogs were more than four pounds heavier than the non-packer hogs so packers are also getting more current. The percentage of packer hogs in the kill mix has been quite high lately so I have been thinking packers are becoming more aggressive in shipping their hogs. I thought we might see a bit smaller kill this week but it came in quite strong at +5.43%. In actual numbers, there were 46K fewer hogs than in the average of the past four weeks so I guess the kill is slowing down. The last H&P Report suggest it will slow even more over the next few week

I forgot I had an order working to buy a June cattle/hog spread at 27.85. Strategically I much prefer this trade from the short side so when I got a chance to cash the trade in for a few bucks, I took it. This is the third time I have been on and off this trade this spring and getting paid just a little chicken feed. One of these times I might get that trade right. I prefer to trade it from the short side. .

Best wishes,

Doc