The afternoon Purchase Index for - - -

4/11/19 was down -0.16 and the model projects the the component on today's kill will change in the range of -0.05 and +0.25. The JJJs settled discount to the component by -0.07. The model calculates the component will need to decline by -0.05 per day for the next two days to close that "Gap". If packers have broken the uptend for now, the JJJs may end up taking a hair cut at cash settlement.

When the afternoon reports came out, they showed that packers had purchased 90.7% of the moving average daily purchases of total hogs and 99.1% on the index hogs and they did this with mildly lower bids.

Cutouts were up 0.49 to 84.43. With the component being a bit weak, packers' gross margins widened to 5.14/cwt. That would give packers $11.06 per hog to pay the electric, etc. etc. I believe they can survive on that but not really thrive so they may be anxious to get their cost of pork down. Packers ran a larger-than-usual percentage of their hogs through their plants today. But there carcass weight of packer hogs was UP +1/3#. Maybe packers have fallen behind a bit in their shipments and are now trying to catch up or maybe they are going to be letting the air out of their bids and they are trying to market their hogs ahead of the decline. Hogs sold off rather sharply in the 5-minute after-market. That is not a good sign for tomorrow.

Best wishes,