The final Purchase Index for - - -

1/4/19 WAS UP +0.96 and the model projects the component on Friday's kill will jump between +0.35 and 0.65. Friday the component moved up 0.10 to 53.68 and the GGGs are now trading premium to the component by 8.37. That is a higher than usual "Gap" but sometimes this time of the year the price of hogs makes a serious move up. And sometimes the move is down but hogs are trading somewhat below the 200-day moving average so I doubt that a serious move down is in the works.

Friday packers purchased 147.0% of the moving average daily purchases of total hogs and 140.7% on the index hogs. I am wondering why packers were so aggressive in buying such large numbers of hogs? It does not appear to me that producers were anxious sellers but packers bid up to make the purchase.

China says they are getting their ASF problem under control. The government is paying producers about $175 for each hog they condemn and threatening criminal action against those who cover up a diseased hog.

I am long the GGGs and summer futures.

Best wishes,