1/4/17 was up +$0.81 and the model projects that the component on yesterday's kill will move up between +0.15 and +0.45. I was surprised to see packers bidding higher yesterday. I thought that with them not killing some days during the holidays that producers would be anxious to sell and packer would take advantage of that to bid lower. Also primal cuts were blistered again yesterday - especially hams. They dropped $7.36. Even with that drop, packers' margins are still in quite good shape. Maybe that is why packers kept the Purchase Index up yesterday.

Packers made a solid purchase yesterday at 99.7% of the moving average daily purchases.

The GGGs settled premium to the component by +6.82. There will be plenty of traders watching that "Gap" and that sets the stage for a potential strong down move if the technical/emotional factors trigger a stop-running move down.

Spread trading has been very active for me for several weeks now. I have cleared enough "Stuff" off my boat so I can take more on and I have sufficient inventory that I can sell if the demand surfaces but not so many that I will be holding a "Fire-Sale" anytime soon.

Best wishes,

dhm