The final Purchase Index for - - -

1/29/18 was UP +0.37 and the model projects the component on yesterday's kill will reverse and be UP between +0.05 and +0.35. With their higher bids, packers only purchased 55.8% of th moving average daily purchases. Either that is the lowest daily purchase we've seen in a long, long time or else my model is garbled. I reviewed the model and it seems to be in order. The did a bit better on index hogs getting 60.5% of them.

Cutouts have shown a little firmness the past few days so maybe packers are not quite as grouchy and will free up a little change in their wallets to bring in higher numbers of hogs today. It won't take many low purchase days like we had yesterday for packers to get short of hogs.

But -

I saw nothing to suggest that yesterday's low purchase numbers were related to shrinking hog numbers. There are some weather factors both in terms of hogs finishing and producers shipping. And the kill so far this week in running below projections. At the same time we have had quite a few weeks where the kill has far exceeded projections but the 6-day moving average carcass weight is not suggesting any decline in the number of hogs in producers' barns.

I remain convinced that supply demand factors here and now will determine hog prices and that the information available in the hog market is far superior to that available in ANY other market. The challenge is to figure out what the data is saying.

Best Wishes,