The final Purchase Index for - - -

2/13/19 was up +0.09 mostly because packers were buying negotiated hogs with a higher bid. There are still quite a few hogs purchased at lower prices so the model is projecting that the component on yesterday's kill will be down between -0.1 and -0.45. The GGGs are trading discount to the component by -0.32. The model projects the cash settlement index will be 54.63 with a range of 54.13 to 55.13. I am going to cash settlement with a couple of GGGs and will sell more in the unlikely event the pop a bit higher.

Packers purchased 89.0% of the moving average daily purchases of total hogs and 93.1% on the index hogs making it a fairly "Normal" day of hog purchases by the packers.

I was concerned that the low cutouts yesterday spelled trouble for us summer bulls and that is exactly the way it is turning out. I am now resigned to the fact that the only thing that is going to prevent us from wiping out the Hog Cycle low of 45.30 on the index posted on 9/1/18 is better trade relations with China. Without that, we may find ourselves in a liquidation phase to the hog cycle that will give us a trough somewhat below 45.30.

Best wishes,