12/30/19 was up +0.70 and the model projects the component on yesterday's kill will by up between +0.15 and +0.45. With their higher bids, packers purchased 125.4% of the moving average daily purchases of total hogs and 114.2% on the index hogs.
Yesterday the component on the 12/27/19 kill was down -0.18 to 58.11. The GGGs settled premium to the component by 13.69. By historical standards that is a lot of "Gap" this close to cash settlement but the whole world knows that China has lost a lot of hogs and they are most likely willing to gobble up any excess pork we have if commerce begins to flow more freely.
The model calculates that packers' gross margins have fallen to $35.76 per Index hog.
I will be glad to get the holidays behind us so the data will be a bit more routine. I am expecting the kill rate to weaken a little as the GGGs move toward cash settlement but can't back that feeling up with data points yet.
Best wishes,
Doc
C