2/12/18 was down -0.08 to 74.25. The GGGs settled discount to the component by -0.90 today. Traders are planning on some soft bidding by the packers over the next two days. We really did not see that in the component change on yesterday's kill and cutouts were firm today so we may see a good part of the "Gap" close with the GGGs moving up a little.

The six-day moving average carcass weight eased to 214.11#. That is +1.83# yr/yr. Packers continue to bring heavier hogs to market. Today packer hogs were +0.82# heavier than the non-packer hogs. Both packer and non-packer hogs were a bit lighter on yesterday's kill but the non-packer hogs shed a bit more than the packer hogs. Packers may be running a few more of their hogs to market now. I can't tell whether they are liquidating their market hogs a little or whether they have expanded and they will now be providing a larger percentage of the supply of market hogs. I will be going to cash settlement with a few long GGGs covering some short calls that are in-the-money.

Best wishes,

dhm