4/18/19 was up +0.48 and the model projects the component on Friday's kill will be up between +0.25 and +0.55. Since the futures market was closed on Friday, it did not react to the +0.35 gain the component made on Thursday's kill. Now we have another probable +0.25 to +0.55 gain to deal with. Logic would seem to suggest that the market will consider these developments favorable and nudge the futures up a bit.

With their higher bids, packers purchased 97.3% of the moving average daily purchases by the time the afternoon report was released and 99.1% on the index hogs. Those are rather small numbers for a "Friday" so it will not be surprising if the final Purchase Index tomorrow makes another leg-up.

The kill last week was down -1.89% from the same week one-year ago. And I wonder - was it down because packers had too much pork to sell and wanted to slow the chain speed or was it because the hogs were in tight supply? Carcass weights held steady suggesting that packers bought and kill hogs as fast as they finished and the lower kill was the result of fewer hogs being available. For sometime the data has been suggesting to me that hogs were being pulled forward mildly. My conclusion, then, is that fewer hogs were available.

It appears to me that the risk is far greater to be short Lean hogs than to be long.

Best wishes,

Doc