MURICO.com Forum

The swine scheduled for delivery report - - -

shows that packers have 14.2% more hogs scheduled than they had on this date last year. Day-after-day packers are getting more hogs lined up than they were able to corral last year. It seems to me that there must be more hogs in producers' barns if packers are able to schedule and kill larger numbers. The hogs are coming in with good weights so the numbers do not represent liquidation of heavies.

From the noon reports the model projects that the Purchase Index will drop a little and the component on today's kill will shed between -0.10 to -0.40. Nothing big just "Death by a thousand cuts."

The numbers continue to suggest that we are in the expansion phase of the hog cycle. Generally, once the expansion phase begins, it will continue until production hits a crest and prices hit the trough. Producers have already put their production plans into place. Sows are already in the breeding pens for the June farrowings and the June farrowings will come to market in December. We don't know what the numbers are but my best guess is that they will be a bit higher.

The expansion track we are on caused the HEG5 to go to cash settlement down 29% from the HEG4. If the HEZ5 suffers the same contraction as the HEG5 suffered, we will see the HEZ5 go to cash settlement around 62.00.

So-

I decided to sell a pair of ZZZs at 66.425. If China develops a pork appetite, I will suffer. If we get a repeat of 1998 (which I really doubt), well, you know what.

Best wishes,

dhm