Thanks for your thoughts on the hogs Itz, as usual they seem to be hard and tricky for me. I have had some good trades in the hogs lately but right now am flat the hogs and will probably stay that way until next week and then I would like to short them if I get half a chance! I am posting what I received from my broker with his thoughts on hogs along with trade estimates on hog & pig for Friday.

LEAN HOGS
Cash was lower, down $1.00. Cash will continue to drop daily. For reference, the latest CME lean hog Index was quoted at 9265, down .91 with the one-day calculated at 9217. Oct futures closed at 8385 with the Dec at 7340, or 1925 points discount. The sharp discount is why the board continues to attract short covering. Packers continue to have mechanical breakdowns. Yesterday’s kill was revised down 7k. Today’s kill came in at only 471k, compared to the estimate of 475. The cutout, as expected, closed higher, up $4.16 at $106.92. Hams; higher hams drove the carcass upward today.

What to Expect?
The trade estimates for the hog & pig, scheduled for Friday, are listed at the end of this comment. The monthly cold storage was neutral to perhaps slightly negative. Frozen pork stocks were reported at 460 mm lbs, or about 10 mm larger than expected. Stocks are down 1% from last year and they still reside well below the 5-year average of 568 mm lbs. Ham stocks were 185 mm lbs compared to estimates of 175. Belly stocks were only 17.5 million lbs at the end of Aug compared to expectations of 20.0 and the 5-year average of 32.6.

I still smell a rally in hog futures likely fueled by rising hams, belly and trimming prices. Perhaps a positive spin from the hog & pig as well. My nose has been pretty accurate of late. Futures are likely holding too much of a discount. In addition, I’m sniffing out a rally in neighboring cattle futures and the stock market seems to be firming back upward. No crisis for now. Understand that I’m not interested in the long side of hog futures, only waiting for a chance to sell, a play to add to current shorts. With ASF less than 800 miles off the coast of the U.S. one must be prepared for an event situation. I don’t want anything to do with the alongside when this happens.

All hogs & pigs 98% 97-100
Kept for breeding 99% 98-100
Kept for market 98%. 97-100
Jun-Aug pig crop 97%. 96-98
Pigs per litter100.4%
Jun-Aug farrowings 96%. 96-97
Sep Nov farrow ints 98.5%. 98-100
Dec-Feb farrow ints 100%. 99-100