12/11/19 was up 0.47 to 59.95. The ZZZs are trading premium to the component by +0.77. The model calculates that the component will need to gain +0.64/day to close the "Gap". If packers have backed up a few expensive hogs as I ex.ect, that may be close to where we are and being long or short the ZZZs presents little risk and essentially no reward. I will hold a few ZZZs to cash settlement anyway.

The six-day moving average carcass weight was steady at 216.33#. That is +2.33# yr/yr. Index hogs were down a little at 214.312#. Packer hogs are +1.87# heavier than the non-packer hogs. Packers seem to be holding their hogs back and killing more non-packer hogs. It seems logical to me that they are doing this because they think the price of pork is going up!

The model calculates that packers gross margins are $50.92/index hog. I think that is enough to keep packers wanting to kill as many hogs as they can.

Best wishes,

Doc