3/12/19 was up +1.40. That is not a typo!! Packer were really wanting hogs yesterday and they were willing to pay-up to get them. The model projects the component will move up between +0.55 and +0.85 clearly setting an up-trend. The JJJs settled premium to the component by 10.79. That is a very large "Gap" but when packers are bidding higher by big numbers it closes a lot of "Gap".

Packers purchased 104.6% of the "Gap"average daily purchases of total hogs and 94.6% on the index hogs.

The September low in the Index has now been confirmed as the "Trough: for this Hog Cycle and the search in on for the next peak. It should be down the road at least a year and maybe quite a bit longer. It could be cut short if ASF hits North American and countries won't take the pork we have ear-marked for exports. Otherwise we are in for smooth sailing for a while. There will be plenty of volatility and that will keep life interesting but at least we now know where we stand relative to the Hog Cycle. Packers appear to have figured this out well before I did because they have significantly expanded production both through larger numbers and by finishing their hogs to heavier weights.

STill HODLing deferred contracts.

Best wishes,

dhm