6/22/15 was down -$0.20 and the model projects that the component on the 6-22-25 kill will drop between -0.20 and -0.50. The down trend is still intact. Packers should have been bidding a bit more firmly to meet the Independence Day demand surge. The fact that they haven't suggests that supply is more than adequate to meet demand.

Yesterday packers made a solid purchase at 103.0% of the moving average daily purchases and they did this with lower bid prices. Perhaps this means that producers are quite willing sellers right now. The six-day moving average carcass weight is holding up quite well so it does not appear that the current high kill rate represents producer-liquidation of market hogs.

So-

My suspicion is that producers have expanded a bit more than the last H&P report suggested and we will be seeing a firm kill rate for a while longer.

The H&P report on Friday will address this issue and sparks may fly in response to it. I'm going to go into the report long some Q/V spreads thinking that there will be more fall hogs coming to market than traders are currently expecting. If you don't hear from me on Monday, you will know I am busy licking my wounds!

Best wishes,

dhm

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