10/19/16 was U P 0.17 to 52.75. This is the third consecutive day that the component has advanced. This does not fit particularly well with the bearish fever that seems to hang over the hog market.

The six-day moving average carcass weight moved up to 211.12# and the increase in weight was almost all packer hogs. Packer hogs are now 1.67# heavier than non-packer hogs. If hogs are in plentiful supply, why are packers hanging onto their hogs and finishing them to heavier weights when everyone KNOWS there is a price collapse coming?

The weight gain is not the surprise. It always happens this time of the year; it is the fact that packer hogs are doing the gaining. Well not totally - index hogs also firmed to 209.70#.

The ZZZs are now trading discount to the component by -11.29. That is enough of a "Gap" that we could have a limit-knee-jerk-gap-closing move and still have plenty of "Gap".

Now is the time to be careful, not cheerful.

I'm still short the ZZZs and GGGs. I wanted to sell ZZZs again today at 41.95 but they didn't go there.

Best wishes,

dhm