The final Purchase Index for - - -

1/16/19 was down -0.08 ad the model projects the component on yesterday will be up between +0.05 and +0.25 because packers still have an inventory of more expensive hogs yet to be processed. It is difficult to project which price-mix of hogs packers will choose to process but I am not timid about giving you my best estimate. With their mildly weaker bids, packers purchased 82.7% of the moving average daily purchases of total hogs and 89.3% on the index hogs.

The GGGs settled premium to the component by +1.97 and the model calculates that it will take an average daily gain of +0.09 per day over the next 21-days to close that "Gap". Over the past 11-years the index has gone up an average of 1.44 from this date until cash settlement. Over the past four years it has jumped +7.50. The most it has ever gained was 11.21 in 2017 and the most it has lost was -14.14 in 2015. It is highly unlikely we will see a loss of -14.14 this year but, as ITZ says, "Brace yourselves."

The sailing could be in rough waters.

Best wishes,