11/23/16 was UP $0.28 AND THE MODEL projects that the CME COMPONENT on Wednesday's kill will move up between +0.05 and +0.35. That will make two days in a row that the component has advanced. The kill so far this week is running less than 1% ahead of the same time last year. There is a good chance that the high kill we have been seeing is producers pulling their hogs forward. That would be consistent with the lighter carcass weights we have seen all fall. Perhaps producers were wary of a repeat of 1998 and hurried a bunch of hogs to market. If that is the case, a collapse in the price of hogs will be avoided.

Packers seem to be doing a good job moving the product as evidenced by the decline in pork in cold storage.

Packers made a good pruchase Wednesday at 91.8% of the moving average daily purchases. But the bid a little higher to get the hogs. The ZZZs are now trading premium to the component by 2.00. Packers can close that "Gap" in a couple of days. If the buying activity the past couple of sessions has been packers buying ZZZs, it is going to be trouble for for the bears of which I have been one but I'm no longer short GGGs and very, very few ZZZs.

Best wishes,

dhm