years ago Long Bear astutely observed, "In the hog market you can always expect the unexpected."

Pork is continuing to sell well. Cutouts today were reported at 104.93 up 15.67 from the same day last year. Demand still seems to be firm.

The afternoon reports seem to suggest that the Purchase Index for today will be UP +$0.50 AND the component on today's kill will move up between +0.15 and +0.45. With their higher bids, it appears that packers really bought a lot of hogs. Producers seemed to have been very motivated sellers today and packers were willing to shell out a little more money to get the hogs.

Last year from this date until the QQQs expired the Index dropped -14.34. The year before the index only dropped -1.50 during the same time period.

I might paraphrase Ralph Waldo Emerson's quote, "What lies behind you and what lies in front of you, pales in comparison to what lies inside of you" thusly:

"WHAT HAPPENED LAST YEAR AND WHAT HAPPENED YEAR BEFORE LAST PALES IN COMPARISON WITH THE CURRENT SUPPLY AND DEMAND FACTORS."

And therein lies the rub:

Will demand hold? It has a tendency to taper off after Independence Day. So far it has been incredible.

and

How many hogs are going to be coming to market? Does the large purchase today signal that producers have plenty of hogs and they are now wanting to move them? Is there a message in the fact that the percentage of packer hogs in the kill Friday and Saturday tumbled? And why were carcasses heavier today when the weather is hot and hogs should be gaining more slowly?

Maybe the morning reports will tell us something but I doubt much. We are just going to have to wait for more time to unravel the pricing uncertainty that we are facing.

Best wishes,

dhm