12/29/15 was down -$0.36 and the model projects that the component on the 12/29/15 kill will drop between -0.15 and -0.45. The price of hogs is really being beaten down. Part of the problem may be that the supply of hogs is quite high. The kill since 12/1/15 is running ahead of projections from the H&P report. If this represents producers liquidating their inventory of market hogs, that could set the stage for a bounce in front of the GGGs going to cash settlement, assuming the H&P report is reasonable close on the estimate of hogs in the 120# to 179# category and demand does not crumble too badly.

Traders seem to be thinking that the H&P report is spot on and the kill is headed downward before the GGGs go off the board because they have pumped the GGGs up to a premium of 6.11 over the index. My bias is that the "Gap" is too wide and there is risk that the Index will not jump that much.

So -

I am short 1 that is "One" GGG. That is not much conviction on my part.

Best wishes,

dhm