MURICO.com Forum

Yes, ITZ, we left a LOT on the table but - - -

we also took some off the table and that counts for something!

Packers finally sprung loose with their data for the 201 reports. The component on yesterday's kill was only down -0.06 to 76.08. The GGGs are now discounted to the component by 1.00. It just might be that packers have a little inventory of cheaper hogs already purchased that will result in the component dropping a bit more than might be expected over the next day or two.

From the noon reports the model projects that the Purchase Index will take another dip in the morning when final numbers are available. It appears that we are not yet to the end of the down trend.

Since there is a fair chance that hogs may show some more weakness being driven by the falling index and since Feb cattle futures may have been beaten down too much relative to cash by technical/emotional factors today, I decided to take a "Lark" and buy a Feb cattle/hog spread at 79.50. My equity run in the morning will not suffer from it since the settle was 79.725 but the story may be far different come Friday morning. I see someone else also bought one at 79.50. I am impressed with how fast the cattle/hog spread will make a move of a point or two. I don't feel very confident about this trade because a spread of 79.50 is still a mighty wide spread!

Best wishes,

dhm

Messages In This Thread

No CME component on the kill for - - -
Re: Looks like I left a lot--------
Yes, ITZ, we left a LOT on the table but - - -