2/10/17 WAS up 0.57 to 74.36. This has cut the "Gap" to +0.52 with the GGGs being premium to the component by +0.52. That silly Hog Pricing Model that I use has certainly been a useful tool this cycle. I generally do my best trading in the two-weeks leading up to the futures going to cash settlement and this it happening again this time. It appears that the surging index may push the GGGs up a half point more so I may end up going to cash settlement with most the GGG inventory I have left.

The six-day moving average carcass weight moved up to 212.68# this morning. That is -1.62# yr/yr. The percentage packer hogs in Friday's kill was one of the larger seen for a while. Apparently the higher bids did not bring in the hogs that packers were wanting so they made up for it by running more of their own hogs through the plants. Packer hogs are still +4.52# heavier than non-packer hogs. Packer hogs were up 1/4# this morning and non-packer hogs were down 2/3#. I believe the non-packer producers are very current in their shipments and the packers probably are also - it's just that the packers have strategically decided to finish their hogs to heavier weights to get more poundage to meet the incredible demand we are currently seeing..

The data does not appear to be very bearish to me right now.

However!

If there is a surge in the kill rate as the last H&P report projects, things could turn quickly when the increase in hog numbers show up at the packing plants.

So far it is not happening so I will just keep on doing what I'm doing and hope that it keeps working.

I'm a bit nervous about how to approach the JJJs when the become the front month.

Best wishes,

dhm