1/13/17 kill was UP 1.01 to 64.49. That has sliced the "Gap" to +1.11 with the GGGs being premium to the component. The component has been up every day for the past seven days. That is a fairly strong up-trend. During this up-move the component has gained an average of +1.10 per day. Gains like that close a lot of "Gap".

The 6-day moving average carcass weight was unchanged today at 213.67#. That is -1.48# year/year. Packers are continuing to bring their hogs to market heavier at +5.16# over non-packer hogs. Index hogs are getting heavier but are still lighter at 212.97#. The packer hogs that were killed on Friday were a little heavier but the non-packer hogs declined by 2/3#. That is a fair sized drop on a six-day moving average. Packers are continuing to bid higher and pull in non-packer hogs while finshing their hogs out to heavier weights.

Foxe's first talkie movie in 1928 was one named MOTHER KNOWS BEST. Perhaps we can re-word that to PACKERS KNOW BEST. I continue to believe that packers have a far better handle on the supply/demand picture for pork than I. If they are finishing their hogs to +5.16#, I think it is because they are wanting more pork.

Cutouts were a little weak today but loins, butts and bellies were up. It was the hams that showed some weakness. Relative to one-year ago, the cutouts are +6.44. It appears to me that packers' margins are in quite good shape. When packers get into margin trouble, they know how to fix it!

I came through the holiday weekend long some GGGs. At this point I'm not sorry that I did.

Best wishes,

dhm