7/19/16 was down -0.30 to 78.24. The sell-off in the QQQs has opened the "Gap" to -2.11 with the QQQs under the index. Maybe there is a flood of hogs ready to bust out of producers' barns. I say that because the kill last week was strong and so far this week the kill is running +3.43% higher than the same period last year. If this turns out to be the case, it will be suggesting that the USDA may have missed on the numbers in the various weight categories and were correct on total market hogs.

Packers are continuing to run their hogs tomarket at a rapid rate. The six-day moving average weight of packer hogs has dropped to the point that they are only 0.30# heavier than non-packer hogs. That's a big drop. The 6-day moving average carcass weights this morning was up a tad to 209.56# and the gain was in non-packer hogs. Packer hogs were actually a bit lighter and Index hogs were down at 208.31#

Frankly, I was a bit surprised to see QQQ hogs drop as much as they did. Maybe I have been listening too much to ITZ and Dewey and not paying enough attention to the data.

Today I replaced some of the Q/V spreads I had taken profits on earlier in the week and I am now asking myself, "Did you really want to do that?"

Time will tell. There is a fair chance that some of the weakness in the Q/V spread today was partially market noise.

Best wishes,

dhm