1/25/17 was up 0.28 to 68.24. The GGGs settled discount to the component by -2.39. The market just keeps insisting that packers are going to start lowering their bids and drop the index over the next two weeks. And they might be right but at this point in time that is not what is happening. The up-trend is still intact and the afternoon reports today (1/26/17) were showing mildly stronger bids and another move up in the index component on the 1/26/17 kill.

The 6-day moving average carcass weight moved up to 213.59# and that is almost exactly the weight last year on this date. I may be wrong, but my bias is that packers are finishing their hogs to heavier weights because they are wanting more pork and NOT because they are getting behind in their shipments. All of the hogs that are going to be shipped between now and expiration of the GGGs are already in the finishing pens and the only way to get more pork is to add more weight onto each hog.

And packers seem to be wanting more pork. When you look at the price of bellies (up 31.74 since 1/13/17) and hams and the cold storage, there is ample reason to see why packers keep on bidding higher and higher. Packer hogs are now +4.96# over non-packer hogs. Packer hogs were steady yesterday and non-packer hogs lost 1/4#. Packers seem to be bidding higher to bring in the non-packer hogs and keep their own hogs to heavier weights.

I keep reminding myself that packers know best.

Today I replaced the long GGGs I had taken profits on earlier in the week. Tomorrow I may regret it! That's the way life is in the fast track.

Again today I was busy putting calendar spread trades on and off my boat. I took inventory today and it appears over the past couple of weeks I have been piling more on than I have been getting off. I don't worry too much as long as my margin keeps growing and I have plenty of free-board on my boat.

Best wishes,

dhm