12/27/16 was up +$0.31 and the model projects that the CME component on yesterday's kill will move up between +0.05 and +0.35. The late surge in the GGGs has opened the "Gap" to 6.75 with the GGGs premium to the component. Demand seems to be surging at these lower prices. Yesterday the primal cuts tacked on 1.09. It appears to me that packers' margins were already quite good so these higher prices for the product may give packers a bit more buying power to bring in the hogs.

My bias is that demand will continue to be strong enough to cause packers to bid higher and move the index up to close the "Gap". The H&P report put the hogs that will be coming to market when the GGGs expire at +4%. That may be enough to surprise me and cause the index to rise less than the "Gap".

It appears, ITZ, that you will get your 65.00 at the opening bell. I have a few long GGGs but I think I may let them work a bit.

Best wishes,

dhm