4/16/19 was up +0.21 and the model projects the component on the 4/16/19 kill will be up between +0.05 and +0.35. The KKKs settled premium to the component by +8.92 and the MMMs were +17.07. These are higher than we see on average but they are not extreme numbers. Last year from this date until the MMMs went to cash settlement the Index gained 26.39 but the index was down at 55.05 compared to 80.06 yesterday. As I was looking over the data, my eyes were drawn to the 120.86 the index hit on this date in 2014. This suggests that when pork is in short supply, people will pay-up to get some.

With their higher bids yesterday, packers purchased 82.4% of the moving average daily purchases of total hogs and 92.9% on the index hogs. These are numbers in line with the usual purchases so I do not expect the final Purchase Index will be influenced very much by the late afternoon packer purchases.

When I read Dennis Smith's post the Dewey re-posted my initial reaction on the re-tooling was, "Why would they do that?"

Then it dawned on me!

They are planning on greatly increased exports and they want to use the cheaper Chinese labor to process the carcasses. If it turns out they actually do retool to ship carcasses, that will be a bullish development that points to increased exports to China.