6/18/15 was down -0.25 to 79.67. The NNNs are now trading discount to the component by 4.02. The high kill this week seems to have the attention of the traders and they are taking the hogs down across the board.

The percentage of packer hogs in the kill has now climbed to 33.9%. One-year ago it was running 31.1%. Last year I was saying that it appeared that packers suffered more from the PED virus than non-packers. It now looks like packers may have responded by adding more sows than the non-packers and this has pushed the percentage of packer hogs in the mix to a higher level. Not only is the percentage of packer hogs up, but their weights are up. One year ago packer hogs were 3/4# lighter than non-packer hogs. Now packer hogs are +2.4# heavier than the non-packer hogs. A fair amount of the increased pork production is coming from expansion by packers.

Even though I have been tracking the hog data carefully and noting that the Purchase Index and the CME Lean Hog Index were both in a down trend and pork production is at a high level, I totally missed getting short hogs to take advantage of the sell-off we are seeing today.

Some days are like that.

Best wishes,

dhm