The CME Lean Hog Index component on the kill for -

12/26/17 was up +0.20 to 61.71. That was a surprise. The GGGs are now premium to the component by +9.31. It will take an ITZ 10-POINT move by the packers to close that "Gap".

The six-day moving average carcass weight dipped to 213.52#. That iws +2.81# yr/yr. Both packer and non-packer hogs were down more than a half-pound. That is a fair sized drop on a moving average. With no-kill Christmas I was looking for carcass weights to bump up a little. Packer hogs are +1.13# heavier than non-packer hogs. Index hogs were also lighter at 213.60#. Is it possible that these lighter carcass weights are signaling that market ready hog supplies are not as plentiful as might be expected?

At any rate I'm still a tiny bit long the GGGs. Yesterday I scalped out of one and back in. Calendar spreads have been moving very well for me lately. I find that I am trading fewer and fewer out-rights and I occasionally will sell a little option premium when the front month get close to expiration and the model is giving me a fair indication of the direction the market is headed.

Best wishes,