The CME Lean Hog Index component on the kill for -

1/31/19 was UP +0.48 to 57.33. The model was projecting some weakness but "NO!" we received a fair-sized jump and I wonder, "How come?"

Have packers had to sweeten their bids to get producers to fight the cold to ship hogs? Maybe and maybe the high kill the past few weeks got the non-packers quite current in their shipments and not as many hogs as expected are now in producers' barns.

The 6-day moving average carcass weight moved up to 215.14#. That is consistent with hogs being backed up a little and is +1.11# year/year. Index hogs were also a bit heavier at 214.13#. Packer hogs were heavier by about 1/5# putting them 4.17# heavier than the non-packer hogs. Non-packer hogs were lighter by -1/4#. Is it possible that the non-packer producers are more current in their shipments than the packer? If that is the case and packers have plenty of their own hogs to kill, they may not be very anxious to buy hogs but will opt to kill their own.

Yesterday the 6-day moving average percentage of packer hogs in the kill mix moved up to 38.2% that is quite a bit higher than the 200-day moving average that stands at 34.7%. One year ago the 6-day moving average of packer hogs was 32.75%. Packers are wanting to be the producers of hogs as well as the processors.

The President says negotiations of a better trade deal with China are progressing well and he may make two trip to China this month to meet with President Xi. There is a deadline of more tariffs on a boat load of Chinese goods if no deal is reached by 3/1/19. It appears that one of the things The President is wanting is lower tariffs on agricultural products. That has the potential of helping pork sales to China - at least that is the way I see things but it probably won't happen if there is no trade deal before 3/1/19. In fact, just the opposite may happen because more tariffs from the President could result in retaliatory tariffs by China and they could be imposed on agricultural products including pork.

So we wait and wonder what is going to happen and all the while Dewey and I are sweating over the summer futures. We received a little breather today for which I am grateful.

Best wishes,