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.