12/22/14 was down -1.14 to 80.90. The GGGs are now premium to the component by 0.98 which is meaningless this far in front of the GGGs going to cash settlement. Perhaps it is significant that the Index is in a strong down trend. I am of the opinion that this down trend is driven more by weak demand rather than by an abundant supply. The kill since 12/1/14 is running about 3.0% below the same week last year. This has only moved cutouts up 2.32. That doesn't seem like much of a price boost on that much drop in supply and the GGGs are actually 4.50 below where they were one year ago. Traders must be thinking that more pork is on the way.

The six-day moving average carcass weight dropped to 215.36#. That is +2.92# year/year. Both packer and non-packer hogs were about a half pound lighter. It appears that producers are quite current in their shipments so I am not expecting much of a bounce in the kill rate in the near term.

Selling the Feb cattle/hog spread yesterday paid dividends today.

Best wishes,

dhm