11/4/19 was down -0.30 to 60.17. With the ZZZs locked limit, the "Gap" has opened to +7.35 with the ZZZs premium to the component. Traders really seem to be thinking pork demand is poised to spike by the time the ZZZs go to cash settlement.

The six-day moving average carcass weight eased to 214.22#. Index hogs also were a bit lighter at 213.79#. Packer hogs are lighter than the non-packer hogs by -0.78 #. From the last H&P Report the model projects the kill rate will decline a little before the ZZZs go to cash settlement. If the jump in the cutouts yesterday is an early indication that Chinese demand is beginning to surface, there should be no problem for the Index to move up enough to close the "Gap" by the time the ZZZs go to cash settlement.

When the morning reports came out, it showed that packers did not purchase nearly as many hogs yesterday as fi% of the moving average daily purchases of total hogs and 95.6% on the index hogs. it could be that the supply of hogs is tightening up a bit ahead of when expected from the last H&P Report. I will be watching for the cutout report today to see if the strong demand for pork continued today. I will not be surprised if the next Hog Cycle crest comes close to the last crest of 134.17 posted on 7/16/14. There is a good chance that the next Hog Cycle high will also be a seasonality high. It could occur summer of 2020 or be put off until summer of 2021.

I plan to continue HODLing summer 2020 futures just in case that is when the Hog Cycle high comes around. My best guess is that we will post the next seasonality high around 7/1/2020 but I have no idea how high it will be. Today "The Market" is saying it will be near the 92.50 level and it will occur about the time the NNNs go to cash settlement.

Best wishes,

Doc