10/15/14 eased by $1.22 and the model projects that the component on the 10-15-14 kill will come down between -0.45 and -0.75.

It appears that the usual fall decline in hog prices has begun but will it be sufficient to close the discount of 18.25 that traders have priced into the ZZZs? That is quite a spread that will take an "ITZ" twenty pointer to get the job done.

But wait - - -

The ZZZs have already taken a 6.90 dip off the 10-7-14 high of 97.30. Perhaps when the spread dipped to 19.20 this morning that was pricing in a ZZZs a bit low. I didn't probe the long side but those who did are now being handsomely rewarded.

The kill this week is coming in higher than projected from the H&P report. Carcass weights are firm in the 213# range. Cutouts are dipping a bit. The Purchase Index is in a decline and the CME Index has been trending downward for five days and the model says that today will be #6.

It appears that the dynamics are right for some wild trading opportunities.

With hogs locked limit down yesterday, the few spreads I have working didn't hurt me too much.

Best wishes,

dhm