The final Purchase Index for - - -

1/4/18 was UP 1.34 AND the model projects that the component on yesterday's kill will be up between +0.60 and d+0.90. Packers were very generous with their money yesterday and I ask myself,, "Why?"

Was it because there is a surge in demand?

Were hogs supplies tightening up"

A more logical explanation my be that producers didn't want to load out hogs in the cold weather.

If the later is the explanation, hogs may get backed up a little and that would not be good.

The GGGs are now trading premium to the component by +7.60. That is quite a premium but at the rate of increase we may see in the component today, that could all be closed by higher hog prices. I'm still long the GGGs but I will take profits on a rally today and then try to get back long at a lower price. This strategy has worked the past few days.

I now have my boat overloaded with calendar spreads. I will dump some in front of the weekend if the market cooperates today.

Best wishes,


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