2/5/19 was down -0.18 and the model projects the component on yesterday's kill will dribble down between -0.15 and -0.45. The GGGs are now trading discount to the component by -0.78.

With their lower bids, packers were able to purchase 87.4% of the daily moving average purchases and 94.4% on the index hogs. That is about an "Average" purchase for a Tuesday so hogs are moving quite well. Carcass weights have been hanging around 215.5# for several weeks and this may be suggesting the producers are keeping fairly current in their shipments and have not fallen behind much even though there were a few low-kill days. One thing seems to be fairly evident: packers have expanded their production. This may mean packers are bullish on hogs or it could mean they have strategically decided they want to control more of the hog market from farrowing to the retailers cases. The low prices we are now seeing may cause some of the marginal producers to send their sows to market and vow to never raise another hog.

The larger producers do seem to be more efficient.

I am still HODLing the summer futures. It did not work well yesterday but so far today it is not causing me a lot of pain.

Best wishes,

dhm