kill for 12/29/15 was down but only by -0.04 to 52.96. That puts the "Gap" at 6.74 with the GGGs being premium to the index component. The six-day moving average carcass weight firmed to 213.74#. That is -2.38# yr/yr. It is interesting to note that the index hogs carcass weight was 212.68# this morning. I think there is a good chance that producers of Index hogs are liquidating their inventory of market hogs and this is taking the six-day moving average carcass weight down a little on the Index hogs.

My calculation is that packers' blended average national cost of carcasses yesterday was 55.24. However the CME Lean Hog Index component on yesterday's kill was only 52.96. If packers develop an appetite for hogs and Index hog producers have liquidated a little, packers could start bidding to see who gets to kill the index hogs. As I see it, demand is crucial in the pricing of hogs over the next few months.

Today I went to the bank with a few more spreads. I am just about getting to the point where I need to buy some more. Scalping did me a little good today and am no longer short the GGGs.

Best wishes,

dhm