five trading days before we go to cash settlement wih the GGGs. This is one time that I am very light on the front-month contracts going into cash settlement. As you know, it is virtually impossible to know what the future holds.

However, as I study the data, the increase in the breeding herd of 3.7% in the last H&P report is being confirmed. In fact it is beginning to appear that the USDA may have under estimated a little. It has been quite a long time since we have had a year/year increase of that magnitude.

The "Hog Cycle" has been a bit tame the last few cycles but the PED virus induced shortage may have cause producers to over-expand when the price of feed dropped. Clearly the supply of pork is increasing with both numbers and weights being up. There is still the unknown of "Demand" and it is being complicated by the shortage of beef and the expansion of broilers and that is without taking into consideration the global turmoil.

The GGGs have shed 18.38 since the H&P report came out. My thinking is that most contracts may lose a similiar amount by the time they go to cash settlement. So far the MMMs have lost 11.60 since the report. There may be another four or five points of down move coming.

That would put the MMMs at cash settlement down about 37.55 from last year. That would be a bitter pill for producers to have to swallow.

With carcass weights continuing to be firm, the kill rate for last week being up 4.1%, packers having 17.2% more hogs scheduled Friday than on the same date one-year ago, cutouts down 1.03 on Friday and -5.39 for the week and more broilers on the way, I'm having a difficult time reconciling that with a limit-up move on Friday.

Is it possible that some technical/emotional factors got in the way of "The Market's" rational, fundamental thinking?

Gumperson's Law says, "The probability of a given event occurring is inversely proportional to its desirability."

On that basis, then, I had better be prepared for another limit-up move on Monday and the trip behind the wood shed that goes with it.

Best wishes,

dhm