12/13/16 was up a SURPRISING 1.27 TO 57.76. Pow!!! Just like that the "Gap" was closed on the first 50% of the cash settlement index. Considering the strength of this up-trend, I'm expecting the next half that we get tomorrow to also be strong so I have added to my long ZZZs. I had not planned to go to cash settlement with any of the ZZZs but the model keeps saying, "Stay the course!"

I was much too timd early on when the model signaled that the down-trend ended and we were headed higher. Sometimes when I get too aggressive I find myself out behind the wood shed and that is no fun.

The six-day moving average carcass weight eased to 211.65#. That is -1.94# year over year. Packer hogs were a mite heavier and non-packer hogs dropped nearly 1/3#. Packer hogs are 4.03# heavier than the non-packers. Index hogs are lighter at 210.69#

One of the first talking movies back in 1928 was a film called, "Mother Knows Best." Today we might para-phrase that title to "Packers Know Best".

And what do packers know?

I believe they know that there is a brisk demand for pork at this price level and

I believe they know that producers have pulled hogs forward to the point that they are very current in their shipments and

I believe they know that they can increase pork production by finishing their hogs to heavier weights and

I believe they know they can fill their current kill needs by bidding a bit higher for non-packer hogs and holding their hogs to heavier weights when prices are even higher and

I believe they know that the inventory of market ready hogs is not burdensome relative to demand.

And I also believe I am going to be lost tomorrow when the ZZZs have expired and the hog pricing model is not very effective as a trading tool for the GGGs because there is too much time between now and when the GGGs go to cash settlement.

Best wishes,

Doc