1/10/18 +1.35 to 69.13. With the jump in the component and the GGGs dribbling lower, the "Gap" has now been cut to +1.72 with the GGGs carrying a modest premium to the component. On first blush, it would appear that the dip in the GGGs this morning is a mistake.

There may be another side to the story, though.

It is possible that the strength in the component the past few days was a weather market with packers having to bid to induce producers to fight the cold to load hogs. Ir's hard enough to load hogs and loading them in near zero degree weather is just not fun!

The 6-day moving average carcass weight moved up to 214.70#. That is +1.12# year over year. Packer hogs were up about 1/2# and non-packer hogs were down -1/4#. Index hogs were up at 215.09#. Packers may be holding a few of their hogs back and pulling in other hogs so when supplies tighten a little later, they will have more of their produced pork to sell at the higher prices.

Cut outs are holding up reasonably well. Perhaps it is export demand that is carrying off a good bit of the increased production.

I'm still a tiny bit long the GGGs and not very happy about it. Perhaps the calendar spreads will give me a Ka!! Ching!!! or two and keep my margin intact.

Best wishes,

dhm