6/25/19 was down -0.19 and the model projects the component on yesterday's kill will drop between -0.15 and -0.45. Yesterday the component on Monday's kill dropped -0.46 to 78.05. The model calculates that packers are losing -$5.27 per hog processed on just the product value and that is before they pay salaries, utilities, insurance, depreciation, etc, etc. That cannot continue. If packers can't get the price of product up, they have no choice but to drop their bids which they are doing and may have to accelerate the rate at which they cut their bids.

With their lower bids, they purchase 98.0% of the moving average daily purchases of total hogs and 101.0% on the index hogs.

The NNNs settled discount to the component 3.64. That is quite a "Gap" this close to cash settlement but with packers bleeding red ink, they may do what they have to do. I shorted the NNNs yesterday and may add to my short position if they bounce today. I am still long the 2020s and may now add some ZZZ2020s. The Chinese still have an ASF problem. Most likely their back yard producers are still liquidating putting excess supply on the market but they may run out of hogs then the launch begins.

Four-years ago my grand daughter posted on this site that my wife had died. Last summer I met a lady on line and we were married in the fall. I have now moved to AZ where she lives. She is a bit younger. She is only 84 and I will shortly be 87. Last week I went to Ohio and closed on our farm/home their and am now re-located. I suppose this will be my final stop. Having turned the farm into "GREEN", I will balloon up my margin a bit but I will stick with trading oneziees and calendar spreads. Only on special occasions will I build a large position. Now IS a special occasion so I have quite a few summer 2020 futures. Fortunately the action in the calendar spreads are keeping my margin mostly intact in spite of the drubbing the summer 2020 futures are taking.

Best wishes,

Doc