9/21/15 was up +0.49 to 71.72. The was quite a bit more of a jump than the model was projecting but it was in harmony with the historical tendency for the index to move up a little as the VVVs prepare to go to cash settlement. With packers' margins being favorable and cutouts holding up quite well, the stage may be being set for the index to move up a little again this year. With the VVVs trading at a mild discount to component, being short the VVVs may not be the best strategy.

But I find myself short quite a few VVVs as the front leg of the V/Z spread. My thoughts are that the ZZZs will gain even more than the VVVs and that seems to be happening today. I will sell more of those spreads above 7.00.

The six-day moving average carcass weight came in this morning a bit lighter at 210.19#. That is -2.35# yr/yr. The only real trend I see here is the fact that packers must be wanting heavier hogs. They are coming to market +5.90# heavier than in 2013 and packer hogs are +4.49# heavier than non-packer hogs. The industry is pushing the efficiency window wide open with heavier hogs, more pigs per litter and more litters per year.

Best wishes,

dhm