12/7/15 was UP +$0.14 and the model projects that the component on yesterday's kill will advance between +0.05 and +0.35. Packers made a decent purchase yesterday with their firm bids - 94.2% of the moving average daily purchases. They really loaded up on Friday so perhaps they did not need quite as many hogs yesterday. I believe packers are still rounding up hogs to meet the holiday demand surge and they may be looking for hogs until the ZZZs go to cash settlement.

With carcass weights firm and the kill progressing at a rapid clip, this up trend may be a bit muted until the until the under 50# category of hogs from the last H&P report begin coming to market. I think that will be around the first of the year. The USDA projected they would be down 0.49% from one-year ago. Last January the index was in the 76-77 range and the HEG5s were trading a point or two above that. With the dollar being powerfully strong and exports struggling, hoping for a ten point gain for the CME Index by the time the GGGs expire may be a bit optimistic. With the GGGs trading at 57.50 this morning, being long them may not be too bad of an idea.

I'm trying to buy the K/M spread at -4.25 and just piled a couple of long M/N spreads on my boat at -1.200

Best wishes,

dhm