3/22/19 was up +3.12!!!!! Most of last week packers were purchasing small than usual numbers. Apparently by the weekend their inventory of hogs was low and they needed to re-load the pipeline and they threw the money at the hogs. It has been a long tie since the Purchase Index has jumped more than three points in one-day. The model projects the component on Friday's kill will be up between 1.80 and 2.20.

With their strong bids, packers purchased 124.4% of the moving average daily purhases of total hogs and 121.3% on the index. These are not particularly strong numbers for a weekend.

The JJJs are trading premium to the component by an unbelievable 16.03 something I have never seen. But i have never seen a time when China might lose 20% to 30% of their pork production capability in a very short period of time either. The model calculates that the component will need to gain an average of 1.12 per day to close the "Gap". Over the past four days the component has been up a average of 1.57 per day. If that rate were to continue, the JJJs would go to cash settlement at 87.51. Because of these strong numbers, I decided to pile three long JJJ pigs onto my boat at 78.775

I share Dewey's concern about the ASF hitting North America. That appears to be the only road block that might keep hogs from continuing their lofty climb.

Best wishes,

Doc