1-9-15 was down -$0.45 and the model projects that the CME Index component on the 1-9-15 kill will drop between -0.25 and -0.55. Hogs are still trending downward and generally the index will continue down a day or two after the Purchase Index turns up. So far there is no indication that the Purchase Index is about to turn up. On Friday packers made a solid purchase of 133.5% of the moving average daily purchases and they did so with lower bid prices.

This tells me that producers are motivated sellers.

Last week the kill was 3.54% higher than the same period last year. Besides that, the six-day moving average carcass weight was up a little and it is +2.24# yr/yr. This seems to suggest that producers have ample numbers of hogs to ship. I believe we are still in the 180# and up category which the USDA pegged down 1.51%. There is a hint beginning to develop that may be giving us a clue that producers have expanded a bit more than the USDA projected.

I'm having a little trouble getting bullish over hogs right now.

On the other hand, cattle are still in short supply.

I bought a Feb cattle/hog spread this morning. So far I am not kicking myself for being too impulsive.

Actually I'm kicking myself for not being impulsive enough and piling on a few more.

Best wishes,

dhm