4/29/19 was down -0.38 and the model projects the component on yesterday's kill will drop between -0.10 and -0.40. This will be the third day in a row that the component has been down and that seems to be the new trend. The MMMs are now trading premium to the component by 4.79 and the KKKs are a 1.51. The collapse in the cutouts has dropped packers' margins to $3.70 per index hog. We end up with grouchy packers when their margin dribble down that much.

Producers were rather willing sellers enabling packers to purchase 140.7% of the daily moving average of total purchases and 102.01% on the index hogs. Those are very large numbers for a Monday. And I wonder, "Are producers becoming very willing sellers as they see packers' margins decline?"

Not a very healthy hog market until we see demand check-in and move the cutouts up.

China still has an ASF problem and they still have 1.3 billion people who like pork but it is not translating into demand for American pork at this point in time and the hog market is experiencing a delayed "March Wash-out".

On average over the past twelve-years, from this date until the MMMs go to cash settlement the index has gained 6.86. In 2017 it gained 22.64 and in 2010 it lost -7.47. This suggests that anything can happen this time of the year as the supply and demand factors work their magic in the market place.

Best wishes,

Doc