7/29/14 kill dropped by -1.11 to 127.36. The softness in the QQQs is keeping the gap between them and the component very wide at 6.43. There are still 11-days of data to come in and that is sufficient time for packers to get the Index down to the QQQs but that is not the way things usually work this time of the year.

On average over the past ten-year from this date to cash settlement the index has gained 0.22 and that is to say that the index is usually quite steady from this date to cash settlement. This year is very emotionally charged because of the PED virus and rightly it should be because nobody knows its impact on the pig crop last winter. The number of reported cases of the virus peaked the week of 2/22/14. I don't think those hogs have started to come to market yet so it is possible that the high kill we are seeing this week is the result of some producers capitulating and deciding to move some heavy hogs to market.

The six-day moving average carcass weight was steady at 213.32#. That is +10.10# yr/yr. Both packer and non-packer hogs were little changed.

The early morning weakness in the QQQs spooked me a little and I missed the trade so I am waiting to see if it gets back down there to jump on the long side looking for a long scalp.

Best wishes,

dhm