1/4/18 was up +1.25 to 54.93. Holy #$@!!?!! What is going on here. Why are packers wanting so many hogs so soon after the holidays and paying up to get them? The GGGs are now trading premium to the component by +6.72. That is a reasonable "Gap" to close by the Index moving higher.

The 6-day moving average carcass weight firmed to 216.40#. That is +1.41# year/year. Index hogs were also a bit heavier at 215.15# which isn't surprising considering the low kill because of the holidays. Packer hogs are heavier than the non-packer hogs by +3.70#. Packers seemingly want to kill heavier and heavier hogs. Butcher hogs have really changed in my life-time.

The lean hog futures did not follow the component higher today. I find this a bit surprising. If packers keep bidding higher, there is a good chance that futures will show a bit of strength. Seasonally there is a tendency for the Index to move higher this time of the year. On average over the past 11-years the index moved up 2.79 from this date until the GGGs go to cash settlement. In the last four years it has gone up an average of 11.71. In 2017 it gained 17.73. With the component more than 9.00 below the 200-day moving average, my bias is that the index will move up enough to close the "Gap" and push the GGGs higher.

So -

I am long a couple of GGGs and a bunch of summer futures. Today I was able to scalp in and out of some GGGs and piled more summer futures onto my boat. It is just about as loaded as I want it now but my load looks like peanuts compared to what Dewey would do.

Best wishes,

Doc