1/10/17 sky-rocketed by a mind-shattering 1.98 to 61.35. With the climbing of the Purchase Index, I think packers are building an inventory of more expensive hogs that will drive the index up for the next two to five days. During the last four days the component has jumped an average of 1.15/day. That's a strong move up.

Producers seem to be getting current in their shipments after the slow-kill holiday season. The 6-day moving average carcass weight eased to 213.62#. That's -
1.67# yr/yr. Packer hogs are +4.87# over non-packer hogs. This tells me that packers are still wanting more product. Non-packer hogs dropped about 1/2# but packer hogs were steady. Index hogs continued to be lighter at 213.21# but they are closing the "Gap'".

I'm not wildly bullish, ITZ, but I do have to respect the data and I don't read much into it that is bearish other than the last H&P report says there are more hogs in the pipeline. They are not showing up yet but they could before the GGGs go to cash settlement. I'm still long three GGGs and have made a scalp and have two working now.

Best wishes,

dhm