5/3/19 was up +0.09. That was a bit surprising since cutouts dropped -1.91. That means packers' margins are pretty skinny. Or does?? If my numbers are correct, packers processed almost 2000 cars of pork Friday and the cutout report accounted for slightly more than 230 of them. So we are mostly in the dark about how well packers did on 87.5% of the pork they processed and 48.94% of those hogs were packer owned hogs. At any rate, the model projects the component on Friday's kill will change in the range of -0.15 to +0.15. The MMMs settled premium to the component by +9.80.

Friday packers purchased only 69.8% of the moving average daily purchases but they had a large purchase on Thursday. On the index hogs, they purchased 95.9% of the moving average daily purchases.

We are still in the chase looking for the next "Crest" to this Hog Cycle. If the geo-political environment remains stable and Trump and Xi can hammer out a trade deal, I am expecting the "Crest" to equal or exceed the last one in the 135 range. On the other hand, if the ASF hits North America or the U.S. gets drawn into a conflict that pits the U.S. against China to the extent that trade comes to a stand-still, the "Crest" will have been hit and we head lower - - - lots lower because we are producing far more pork than the American consumer will carry off at this price level.

In over-nite trading, the Dow is down 500 points. .

Best wishes,

Doc