2/6/2020 was down -0.89 ti 59.13. That is very much in line with the projections the model made from the early morning reports of hog purchases. The GGGs are now trading discount to the component by -1.66. Packers gross margins are at $12.31/index hog. I think packers would like a bit more than that so the chances of firm bids are not to great until the kill rate begins to decline.

The 6-day moving average carcass weight firmed to 217.87#. That is +2.60# year/year. Index hogs were a bit lighter at 214.03#. On 1/13/2020 Index hogs were 216.33#. This seems to be suggesting that producers of Index hogs are quite current in their shipments and packers have falllen behind in their shipments. Packer hogs are now +4.01# heavier than the non-packer hogs. The percentage of packer hogs in the kill mix is now climbing so packers may be ready to ship hogs a bit more aggressively now. As near as I can tell, it has not worked out very well for packers to hold their hogs back to heavier weights and pull in more INdex hogs.

The limit up move was a nice help to my margin yesterday since I am HODLing a bunch of summer futures and I may be getting a little more help today. This morning I have been . . take a trip to the bank with the profits from a long N/Q spread. Yesterday I took profits on a long Q/V spread. My margin would really be hurting without the steady stream of calendar spread trades that keep coming and going from my boat.

Bet wishes,

Doc