1/12/17 was UP +$1.24 and the model projects that the CME Lean Hog Index will jump between +0.65 and +0.95. Packers have some up-trend going in the prices they are willing to pay for hogs. It's my feeling that packers are wanting hogs because they are making money in processing them and marketing the pork. The price of the primal cuts dipped a little yesterday but packers' margins seem to be in good shape.

The Feb futures are now premium to the CME component 3.60." The way packers are bidding for hogs, it won't take them long to close that "Gap".

I continue to feel that packers finishing their hogs significantly heavier than the non-packer hogs is a clear message that packer are wanting more pork.

In the T-Bond market conventional wisdom says, "Don't fight the Fed."

It just might be that we can re-write that mildly in the hog market and say, "Don't fight the packers!"

Heavy packer carcasses seems to me to be a clear message that packers are bullish and feel a need to finish their hogs to heavier weight to help meet their need for pork.

So I am continuing to stay long the Feb futures and buy dips and sell rallies.

Calendar spreads are continuing to be active. I have plenty on my boat to peddle and room to buy more if the price is right.

Best wishes,

dhm