the afternoon reports the model is projecting that the Purchase Index will be up +$0.26 and the CME Lean Hog Index component on the 8-20-15 kill will move up between +0.05 and 0.35. So far this week the kill is only up 3.69% over the same week last year. It should be up twice that.

With cut outs showing some weakness, I would think packers would be bidding down for hogs. On 9/18 and 9/19 packers only made fair purchases of hogs at 88.2% and 90.4% respectively of the moving average daily purchases but when I look at the scheduled numbers, packers have 17.3% more hogs scheduled than they had on this date one year ago.

What in the world is going on? The numbers are just not making sense.

One number that is making sense, though, is the "Gap". Futures ARE discounted to the component by -14.52 on the last trade this afternoon. About this same time last year the "Gap" was -14.38. By 9/5/15 the "Gap" had moved to +8.84 with the Index having dropped 12.47 and the HEV4 having tacked on 10.75!!

And the point is??

The CME Lean Hog Index and the VVVs can do mighty wild things this time of the year!!

It is one thing for the Index to have dropped 12.47 last year from a very lofty 109.25 and it would be quite another thing for the Index to drop 12.47 this year from its present modest 79.09.

At least that's my opinion.

I went long one VVV pig just before the close. I'm not planning on waiting very long in the morning to unload that fell'a. Even so, I would rather be long than short and would probably prefer flat to either long or short.

Best wishes,

dhm