"Puke", ITZ. On a daily basis, packers have been buying hogs like crazy. Some of the daily purchases reported by the USDA are sky high. Then yesterday the swine scheduled for delivery report showed that packers have 2.6 million hogs scheduled compared to 2.2 million on this date last year. That is an increase of 368K or 14.09%.

The kill this week is running 25.11% higher than the same week one-year ago and the hogs are still coming in at heavy weights with the 6-day moving average carcass weight still running 1.95# or about 1% higher than one year ago.

This adds up to a bunch of extra pork.

So far demand is carrying it off quite well but there may be signs starting to surface that bear watching. For instance, the carcass cutouts yesterday were 4.56 below one year ago. That's down 5.2% year/year. A big part of that problem are hams. They are down 5.25 or 7.6%. I accidentally deleted my belly prices so I don't know how they are doing but they are important.

The last H&P report suggests that there is going to be a gradual bump up in the kill rate for several weeks to come. These numbers are causing me to discard my view that the index would rise up to close the "Gap". Maybe the index will sag and drag the GGGs down with it.

High beef prices may cause some consumers to shift to pork which could support prices but there is the chicken element and that will go the other way.

We still need to be vigilant and cautiously optimistic in our trading, ITZ.

Best wishes,

dhm

P.S.: Would you kindly drop me an e-Mail at dhm@murico.com ?