12/13/16 was up +$0.53 and the model projects that the component on yesterday's kill will move up between +0.50 and +0.80. With the ZZZs settling premium to the component by +0.69, it appears that the "Gap" will be closed when the 201 report comes out at 11:00 this morning and that represents 50% of the cash settlement index. The up-trend in the index still seems to be intact.

With their higher bids yesterday, packers only purchased 72.8% of the moving average daily purchases. That is the lowest percentage I have seen for months-and-months. Chances are fairly high that packers will be wanting hogs today, so the other half of cash settlement index for the ZZZs might also be quite firm. I'm going to hang onto all of my long ZZZs looking for another 0.50 to 1.25 a cash settlement. If there is much weakness in the ZZZs today. I will pile more onto my boat and take them to cash settlement.

The first half of December has been one of the best I have had for a long, long time with both hogs and bonds performing well.

Best wishes,

dhm