12/7/18 was up +0.18 and the model projects the component on Friday's kill will change in the range of -0.10 and +0.20. The ZZZs settled discount to the component by -1.75.

Packers purchased 142.4% of the moving average daily purchases of total hogs and 128.8% on the index hogs. It appears that packers were really wanting hogs and produces were really wanting to ship hogs. The packers desire for hogs outweighed the producers desire to sell and we got a mild bump-up in the Purchase Index.

Historically there is a very strong tendency for the component to show a bit of firmness in front of the ZZZs going to cash settlement. Perhaps that is because packers are wanting hogs to meet the increased holiday demand. With the ZZZs settling Friday at a discount to the Component, my bias is that the ZZZs will show a bit of firmness as we go to cash settlement this week.

Still long the summer futures and ready to buy today on a dip. It looks like the long Z/G spreads are going to take a bite out of my margin. Sometimes things like that happen.

Best wishes,

Doc