1/16/2020was up +0.16 to 60.54. The GGGs are trading premium to the component by 6.94. The component must rally at a faster clip than it did on yesterday's kill otherwise the GGGs will have to give up some to close the "Gap". The model calculates that the component needs to gain +0.36 per day to close the "Gap". It has gained an average of +0.41 per day over the past four days. Packers need to get better prices for the cutouts if they are going to bid much higher for hogs. By the time we get to the lower kill that occurs around Memorial Day I think cutouts will be quite a bit higher. I am not very confident there will be much of a rally in cutouts by the time we get to Valentines Day.

The 6-day moving average carcass weights dropped to 217.63#. That is +1.71# year over year. INdex hogs are a bit lighter at 215.57#. Packers are continuing to feed their hogs to heavier weights. They are now +2.72# heavier than the non-packer hogs.

Best wishes,

Doc