1/3/17 was down -$0.77 and the model projects that the component on yesterday's kill will drop between -0.25 and -0.55. Weakness in the index is expected since producers have a back-log of hog to ship and the holiday demand period is over. The questions are, "Where will the index be on 2/14/17 when the GGGs expire and how wild will the ride be getting there."

Over and over again when there is a significant "Gap" when we get a new front month contract there will be a major one-day move to partially close that "Gap". Yesterday we got that major "Gap" closing move. There may be more to come, but my bias is that once we get through the holiday back-log of producer shipments, there will be enough firmness in the Index to close the "Gap".

But I won't bet the farm on it. I will keep right on spreading and looking daily scalps until we get close enough to expiration for the hog pricing model to become an effective tool to trade fundamentally.

Yesterday I was able to re-load my boat with most of the long M/N spreads I took to the bank last week.

Best wishes,

dhm