MURICO.com Forum

The final Purchase Index for - - -

2/25/2020 was down -0.70 and the model projects the component on yesterday's kill will drop between -0.25 and -0.55. If you look at the raw data, you will see that packers were bidding higher in almost every market, yet the Purchase Index took a significant hit and you may wonder, "Why?"

Well, packers bid up and brought in a lot of negotiated hogs and even though they bid quite a lot higher for the negotiated hogs, the price was significantly lower than the formula hogs they replaced, thus the drag on the component when those cheaper negotiated hogs are killed and it should have been yesterday. There is the possibility that packers higher bids yesterday is signaling tighter supplies of market ready hogs even though the Purchase Index drifted lower as may the component on yesterday's kill.

Packers purchased 91.7% of the daily moving average daily purchases of total hogs and 99.2% on the index hogs.

Best wishes,

Doc