1/22/2020 was up a paltry 0.02 to 66.30. The GGGs settled premium to the component by +7.20. The model calculates that the component will need to gain an average of +0.50 per day from now until cash settlement to close that "Gap". It does not appear that the price of hogs is advancing at a clip that strong so I am still short GGGs. Primal cuts were only up +0.10 and the model calculates that packers' gross margins were $37.20 per Index hog.

The six-day moving average carcass weight moved up to 216.76#. That is +1.51# yr/yr. Index hogs were also a bit heavier at 214.19# and packer hogs were +2.96# heavier than the non-packer hogs. The percentage of packer hogs in the kill mix has slipped a bit and is now running 38.9%.

Price is always determined by current supply and demand factors -

Not by historical data or historical data patterns although historical data may tell us something about seasonality tendencies.

Not by charts and technical analysis although knowing where prices came from may give a clue relative to where prices may or may not go and it is certainly easier to figure out where prices WON'T GO than where they WILL GO!!

The only constant I have been able to identify in the market place is the fact that time passes. So I am testing selling option premium that will decay away as time passes to work in tandem with plenty of calendar spreads. Selling option premium seems to be working quite well on the GGGs but worked only fair on the ZZZs.

Best wishes,

Doc