10/30/15 was down -$1.38. Packers are getting serious about bringing the price in line with the collapse we are seeing in the price of pork. The model projects that the component on the 10/30/15 kill will drop between -0.80 and -1.10.

Hogs are moving rapidly to market with packers having bought 122.8% of the moving average daily purchases on Friday. Hogs are finishing rapidly I think and if producers take this as a good time to get hogs out of their barns and reduce their inventory, it could burden prices down. Producers who are well hedged are the lucky ones!

Traders have the ZZZs discounted to the index by 11.20 with more than a month to get to cash settlement. That is enough time for a lot of price movement to take place!

I am long a few G/J spreads but don't intend to load my boat with anymore until some of these have made their way to the bank. On average over the past twelve years they have gone to cash settlement at -2.975. Being at -4.725 makes being long sound reasonable until you look at 2013 when it went to cash settlement at -9.05.

Best wishes,

dhm