final Purchase Index for Friday will be late. The afternoon Purchase Index was pointing lower. Looking at packers' margins, I think there is a good chance that packers will have been bidding lowing Friday afternoon and the component will skid even more than projected from the afternoon reports.

The ASF problem in China continues to be a puzzlement. It seems to be clearly established that China has lost a large portion of their hog breeding herd which has put quite a bit of pork on the market now but will show up as a big short-fall a bit later. The thing that is not clear to me is how their government is going to respond. In a controlled society like they have and with a trade war going on, I suppose they could impose price controls and rationing that would limit or greatly reduce imports. I am taking the posture that the seasonality high for this year is still to come and will be hit sometime in August and it will be somewhat higher than the seasonality high-to-date of 84.59 posted on 5/17/19. Relative to the next Hog Cycle "Crest", my target is that it will match the last one of near 135 posted on 7/16/19 and may come in the summer of 2020 although it could be delayed for a year or so. I have piled a bunch of summer 2020 futures on my boat to take advantage of this anticipated price surge.

But I may be wrong.

It may turn out that both the seasonality high and the Hog Cycle "crest" was posted on 5/17/19 when the CME Lean Hog Index touched 84.59 if this trade war stops exports and domestic demand has to carry off all the pork we are producing. I will keep a bottle of Tums handy.

Best wishes,

Doc