1/23/17 was up +0.48 to 67.55. The GGGs are now trading discount to the component by -2.32. From the noon reports, it appears that packers are being quite generous with their bids and the component on today's kill will once more be UP.

The 6-day moving average carcass weight dipped to 213.45#. That is only -0.16# yr/yr. Carcasses are gradually getting heavier and heavier compared to last year and it is the packer hogs that are getting heavier. They are now +4.27# heavier than the non-packer hogs. Both packer and non-packer hogs were about 1/3# lighter today. I'm thinking producers are very current in their shipments. I am also guessing that packers are not short the futures. With packer hogs coming to market so heavy, I think packers are trying to figure out how they can get more pork. The only way they can is to finish to heavier weights because all of the hogs that are gong to be coming to market for the next several months have already been born so their only option is to finish them to heavier weights..

Steiner's last Daily LIvestock Report shows packers' margins at a very attractive $40.00 per hog and it also projects that Chinese imports will be on the rise due to the cost of producing hogs in China. This helps me understand why packers are finishing their hogs to heavier weights. Actually I thought I had figured out "Why?"; This is just some confirmation to my thoughts.

Yesterday I was on the verge of stopping out of the long GGGs. Today I am glad that I didn't .

Best wishes,

dhm