Monthly cold storage comes out Friday afternoon at 2:00. It likely will show a very small belly frozen stock figure. Since Sep 1st, however, we believe bellies have been placed into the freezer at breakneck speed. Eventually, despite record large production, this activity will force a bottom in the fresh belly market. Users got caught without inventory in the freezer in the fourth quarter of last year, causing a surge in fresh prices late in the year. They’re not interested in repeating that mistake which was a pure misjudgment of demand. We caution against being bearish lean hog futures because demand for U.S. pork remains outstanding. If this demand continues, at some point the packer will be forced to compete more squarely for inventory, resulting in a cash rally and a narrowing of margins. Producers need to keep some kind of hedge protection in place, especially in the case of trade agreement meltdowns. However, our spec crowd has been encouraged to purchase calls.

DH, I have been very close to getting back in market. My first sale on Feb is at 64.50 and they have been to 64.40! Like you I have a hard time being bullish on this market, but a lot of folks are! If I was holding a large position "long or short" I would be very nervous. All it would take for a L/U move would be for China to come back in market. All it would take for a L/D move would be for the trade negotiations to blow up, and both of these are real possibilities! AND we have the P/R next week!

DH, you mentioned Blind Hog, we haven't heard from him for a long time.

Dewey