11/17/15 was down -0.20 to 55.94. As I look at my screen I can see that the ZZZs are trading discount to the component by -1.17. Usually this close to cash settlement the Index has a strong influence on where traders bid the futures and I anticipate that will be the case going forward for the ZZZs.

The component did not drop as much as the model projected. Packers ran more expensive hogs through yesterday than the model projected. I don't get to select which hogs the packers will kill; I just try to guess which ones it will be and the model was wrong yesterday. I'm suspecting there are some cheaper hogs already purchased so we may see a little compensatory drop in the component tomorrow unless hog supplies are tightening up and packers end up bringing in some more expensive hogs.

The six-day moving average carcass weight firmed to 214.35#. That is -1.02# yr/yr. I do believe producers have been selling aggressively. I may be saying that because that would be my marketing mentality because the data to support that idea is rather sparse.

Ka!! Ching!! Just covered the short Z/G spread I put on this morning and made a quick trip to the bank. Now have an order to re-sell it at -1.60. It has turned out to be a good idea to have sold the ZZZs on the early morning spike. I'm still riding with one and have scalped in and out on several others.

Best wishes,

dhm