6/28/19 was down -0.49 and the model projects the component on the 6/28 kill will drop between -0.40 and -0.70. The NNNs settled discount to the component by -3.34. The model calculates that the component will need to drop an average of -0.32 per day to close the "Gap". Over the past 6-days the component has dropped an average of -0.44 and over the past four days it has dropped an average of -0.77 per day. The data makes me think packers are going to continue lowering their bid prices because:

1. At Friday's prices, packers paid +$3.41 per hog more than they received for the primal cuts. And they had to pay salaries, utilities, etc. etc. on top of that.

2. Historically the price of hogs tends to soften after retailers fill their cases for the Independence Day holiday.

3. The H&P Report showed the 180# an up category of hogs was +7.51% higher than the same period last year suggesting the kill is going to continue to be strong. .
noo4. Over the past seven years the seasonality high for the CME lean hog index has been July 1st. It appears that it came early this year when the CME Lean Hog Index hit 84.49 on 5/17/19 so we are now in the chase for the seasonality low

Even though packers were bidding lower, they were still able to purchase 102.7% of the moving average daily purchases of total hogs by the time the afternoon report came out and 97.2% on the index hogs.

Best wishes,

Doc.