4/22/19 WAS down -0.04 an d the model projects the component on today's kill will be up between +0.10 and +0.40. Packers still have an inventory of more expensive hogs purchased that should be sufficient to keep the index climbing for another day or two even if the Purchase Index shows some weakness. The MMMs settled premium to the.component by 11.90. On average over the past 12-years from this date until the MMMs go to cash settlement the index has gained an average of 9.03 per year. During the last four years the index has gained an average of 18.80 per year during this time interval.

Packers had purchased 78.8% of the moving average daily purchases by the time the afternoon report was printed. That is fewer hogs than are generally purchased on a Monday at that point in time. The stage may be set for packers to have to end up the day getting the number of hogs they are wanting for this week. The percentage of index hogs. purchased was even lower at 69.7%.

The cold storage report that was released after the market closed showed that pork in storage was down 1.0% from last month and down a very small amount from last year. I don't know why there was so much weakness in the hog futures today, but if traders were concerned about the amount of pork in cold storage and sold futures because of this concern, it would appear that they made a wrong decision. It seems to me that the cold storage report was more bullish than bearish.

The kill today was very, very weak being down nearly 30% from the same Monday last year. That's a big dip.

Still long the deferred futures and a nice assortment of calendar spreads.

Best wishes,

Doc