11/29/16 was UP +0.55 to 8.50. The model correctly projected that the component would be "UP" but it missed on the magnitude off move up. The ZZZs are trading at a premium of 2.58 to the component. Traders foresee a continued rise in the CME Index over the next couple of weeks. The kill so far this week is falling below that projected from the last H&P report. The possibility that producers pulled hogs forward causing the larger than expected kill is starting to look like a distinct possibility. Perhaps packers were aware of this happening so the held their hogs back to heavier weights and killed the non-packer hogs.

The 6-day moving average carcass weight moved up this morning to 211.80#. That is only -2.05 year/year. Packer hogs were heavier by 1/3# and non-packer hogs were lighter. Packer hogs are now heavier than non-packer hogs by 3.91#!!! It is beginning to become clear why packers were finishing their hogs to heavier weights. They knew the non-packers were pulling hogs forward. Index hogs are lighter at 210.35#.

I'm now long the ZZZs but not very long.

Best wishes,

dhm