5/9/19 was up 0.28 and the model projects the component on yesterday's kill will change in the range of +0.10 to -0.20. Packers may still have an inventory of less expensive hogs purchased but not processed that will tend to hold the component down for another day or so but it appears that the down trend may have been halted. The MMMs settled premium to the component by 7.28. "The Market" is probably anticipating the supply of pork is going to contract mildly and demand will firm as we move toward the Independence Day holiday grilling season.

Packers purchased 82.0% of the moving average daily purchases of total hogs and 90.0% of index hogs.

The higher-than-usual volatility continued today and it had me Holding On for Dear Life but I did muster enough bravery to buy an August-20 limit down. I had to remind myself that there are 1.3 billion people in China who like pork and the supply of Chinese pork may contract by 30% this year. Trump and Xi may not reach an agreement but that does not feed hungry mouths so it should not send the price of hogs down. Maybe there will be some negative impact on U.S. exports to China but pork will be taken out of the world supply to augment Chinese supply and help meet their demand which in turn should firm the world price of hogs.

Best wishes,

Doc