3/18/19 soared again yesterday jumping +1.69. That is the largest one-day jump yet since the down-trend broke on 3/6/19 and embarked on an up-trend. If hogs have been pulled forward some as the data seems to be suggesting, there is plenty more up-side coming as the kill rate cools off as it almost always does between now and the Independence Day holiday. Perhaps packers have read the market correctly and are finishing their hogs to heavier weights to increase the poundage. They have also expanded the number of hogs they are producing. The percentage of packer produced hogs in the kill mix continues to run several percentage points higher than one-year ago. The JJJs are trading premium to the component by 13.97. That is a huge "Gap" but when cutouts jump 3.50 in one day, it gives packers the wherewith to sweeten their bids.

Yesterday packers purchased 111.3% of the moving average daily purchases of total hogs and 93.7% on the index hogs. For packers to sweeten their bids by +1.69 and only purchase 93.7% of the moving average purchases may be the first hint that the supply of hogs is beginning to fall short of expectations.

I am still HODLing all deferred contract and moving calendar spreads on and off my boat at a brisk clip.

Best wishes,

dhm