Spread Wide in Hogs
The spread between cash direct hogs and formula hogs is the reason CME Index is so high. Last spring it happened when packers took contract and formula hogs first. Moving into December it is likely cash and formula contract could converge with formula hogs dropping to cash market.
Ahead, cattle buyers will need to pay up for cattle that meet specifications for the previously contracted beef and then deeper discount cattle that aren’t the grade and weight needed.
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