2/20/17 was "UP" again. This time by +$0.34 and my Hog Pricing Model projects that the component on the 2/20/17 kill will continue its upward march with a gain between +0.20 and +0.50.

With their higher bids, packers were only able to purchase 80.8% of the moving average daily purchases. That is one of the lower numbers I have seen for a while. Perhaps packers are going to have to run some more of their heavies to their plants again this week to meet their packing needs.

Price is always determined by supply and demand. I don't know where this incredible pork demand is coming from but it has packers sparring with each other to see who gets to kill the hogs to meet it.

Historically there tends to be gentle decline in the kill rate from now until Memorial Day. The last H&P report suggested that the decline may be a muted this year due to their projected higher inventory of market hogs. As I watch the 6-day moving average carcass weight and see packers holding their hogs back until they are four to five pounds heavier than the non-packer hogs, it just strikes me that they are wanting more pork and the only way to get it right now is to put more on each hog and this they are doing.

In the bond market it is said, "Don't fight the Fed."

In the hog market it might also be a truism to, "Don't fight the packers".

And the packers are saying, "Gimme more pork." They are saying it with higher and higher bids and by finishing theie hogs to heavier ad heavier weights.

Still long the JJJs and calendar spread all over the place.

Best wishes,

Doc