2/1/16 was UP +$1.15 and the model projects that the component on the 2/1/16 kill will be up between +0.75 and +1.05.

And the GGGs are down -0.60 this morning closing the "Gap" to 2.61 with the GGGs being premium to the component.

Even with the higher bids packers were throwing at the index hogs, they made the smallest purchase of index hogs that they have made for many weeks. It continues to appear to me that producers of index hogs are very current in their shipments and packers are in a scramble to see who kills the index hogs.

When we get this close to cash settlement the "Big Dogs" in the hog trading business seem to know what is going on and price the futures appropriate to where we are headed for cash settlement. On this basis, then, the market is right and I am wrong in being long the GGGs. But I have to do what the data dictates. The strong up-trend in the Purchase Index seems to be saying the Index is going to climb for a bit longer - enough longer to push the GGGs upward.

I violated a sound principal of trading this morning - I added another long GGG to a losing position!!!

Best wishes,

dhm