MURICO.com Forum

"Due to technical - - -

problems" is the excuse posted on the USDA web site to point out that the morning reports will be late. I guess we can't lay the problem off onto the packers today.

From the afternoon reports yesterday, the model is projecting that the Purchase Index for 7/9/14 will be up $0.52. Based on this, the projected change in the CME Index component on the 7/9/14 kill will be up between 0.50 and 0.80. With the drop we are seeing in the NNNs this morning, if we get a bump of 0.50 in the index, the gap between the NNNs and the Index will be nearly erased.

If packers keep their bids steady to firm, the stage will be set for the Index to push the NNNs up a little. Nowhere is it written that packers HAVE to keep their bids firm. On average packers let a little air out of their bids this time of the year although they did bump their bids up by 2.24 during the last five days prior to the NNNs expiring in 2005.

By noon yesterday, the number of hogs purchased was a bit below average even though packers were keeping their bids firm.

My bias is that for the next few days packers are going to be competing to see who gets to kill the dwindling number of hogs so they will keep their bids firm. I'm long the NNNs and have orders working to add more if this morning's dip goes lower.

Best wishes,

dhm