7/29/16 was down -0.68 to 72.41. The VVVs are now trading discount to the component by a very strong -12.01. Traders are buying into the idea that there are going to be plenty of hogs coming to market and the price of the product is going to need to back-off a little in order to encourage the consumer to carry-off all the pork that is being produced.

If the Chinese come into the market at these lower prices, there are enough of those folks to carry-off a lot of pork!

The thing that concerns me is how well the index will hold up when fresh corn begins to flow and compensatory growth sets in ballooning the kill rate up even higher.

The six-day moving average carcass weight eased to 208.16#, That is -2.66# year/year. It appears that producers are keeping very current in their shipments. That is going to help keep the amount of product down. It is especially the packers that are hurrying their hogs to market. The carcass weight of packer hogs is -0.6# under non-packer hogs. That is way, WAY down from where it was in mid-April. It seems to me as packers aggressively move their hogs to market, they will be less inclined to pony-up to pay for index hogs.

Even so, producers of index hogs are doing quite a good job of keeping current in their shipments. Index hog carcass weight are lower at 207.35# although that was up a little this morning.

I may have sold too many VVVs this morning. But I have been able to cover about half of them so will sell again if they once more "Pop Higher".

Best wishes,

dhm