1-2-15 was down -0.45 putting the component at 77.75. The GGGs are now premium to the index by 2.53. My bias continues to be that the supply of hogs will be low long enough to push the index up enough to close the "Gap". But first I think there is a good chance that technical/emotional factors will drop the GGGs to 79.80 so I am patiently waiting (not really) for the GGGs to drop to my bid. Today's action makes me think it might happen.

The six-day moving average carcass weight moved up to 217.19# with both packer and non-packer hogs getting heavier. That is +2.64# yr/yr. It is not surprising that producers fell behind in their shipments with the slow-kill holiday period. It may take packers a week or so to get current and halt the increase in the carcass weight.

I bought the K/M spread this morning at 3.625. It looks like I was a little anxious and should have held out for 4.0. It has been a while since there has been as much action in the K/M spreads as we have seen this morning.

Best wishes,

dhm