7/18/16 was down -$0.54 and the model projects that the component on yesterday's kill will drop between -0.40 and -0.70. Packers made a solid purchase at 118.5% of the moving average daily purchases with their lower bids yesterday.

Yesterday the cutouts made a nice gain but that will not necessarily translate into higher hog prices. Packers don't mind widening their margins a little if they can.

There is a hint in the data that the kill rate may be headed higher. It does not appear to me that the number of heavy hogs were as large as the USDA reported so there may be a bulge in the kill rate if their weight-categories were off but the total number of market hogs was fairly close.

Best wishes,

dhm