12/19/19, Du Rock. It actually came in at 59.69 down-0.44. As I am sure you know, the GGGs settled premium to the component by +10.99. Last year from this date until cash settlement the Index tacked on a measly +0.37 even though the "Gap" was +7.25 with the GGGs premium to the index. On average over the past nine-years, according to my records, the index gained an average of +2.65. The most it gained during this time period was +17.13 in 2017 and the largest loss was -23.18 in 2015.

Bottom line -

Things can get mighty wild this time of the year.

The +10.99 "Gap" is nothing to sneeze at, in my opinion. All it takes is a few ship loads of pork going to China and the supply/demand dynamics change in a hurry!

The 6-day moving average carcass weight firmed to 215.65# on Thursday's kill. That is +1.96# yr/yr. Index hogs were a bit lighter at 213.7#. Packer hogs were only +0.52# heavier than the non-packer hogs.

Primal cuts have taken quite a beating in the past two weeks dropping from 82.08 to 77.78. This has lowered the gross packers' margins to $35.85 per index hog. Not exactly a bullish scenario especially with the holiday demand being well supplied now.

The afternoon Purchase Index dropped -0.60 and the model projects the component on Friday's kill will be down between -0.20 and -0.50. By the time the afternoon reports were released packers had purchased 97.7% of the moving average daily purchases of total hogs and 106.2% on the index hogs. With Christmas coming up and the kill most likely down next week, packers probably were not aggressive buyers Friday afternoon.

The kill this week cooled to +2.59%. This fits with the last H&P Report. If that carries over to the H&P Report on Monday, it may not be very bearish for the near term futures.

Best wishes,

Doc