The CME Lean Hog Index component on the kill for -

1/2/18 kill jumped +1.14 to 63.53. That is the largest one-day jump we have seen for quite a while. The premium that the GGGs have been carrying to the component has now closed to +7.02.

The six-day moving average carcass weight was nearly unchanged at 215.45#. That is +1.55# yr/yr. Packer hogs are heavier than non-packer hogs by 1.27#. Non-packer hogs were lighter by about 1/4# while packer hogs were nearly unchanged. Index hogs were a bit lighter at 214025#. It does not appear that producers got behind in their shipments during the holiday-shortened kill weeks. If that is the case and demand hold, we may see the component strengthen a fair amount before the GGGs go to cash settlement.

I am continuing to stay long the GGGs. The carcass weights seem to say there is not a glut of hogs clamoring to come to market so that may set the stage for the index to close the "Gap" and possibly push the GGGs up a point or so. But I am not wildly bullish; just trading the historical tendency for the index to rally a bit from now until Independence Day.

Best wishes,