12/10/15 was down -0.24 to 56.28. The ZZZs are now discount to the component by -0.31 and we get two more days of data to get us to cash settlement. It appears to me that another down-trend has now emerged for both the Purchase Index and the CME Lean Hog Index. What is not clear is how strong it will be or how long it will last.

I have been saying that I wanted to get long the GGGs by selling the Z/G spread on a bounce and letting the ZZZs expire out. Well it didn't happen and I sat on the dock and watched my boat sail off without me. But there was some good news. I made seven trips to the bank when I was able to tote a variety of spreads across the pond and capture my profit target. Some of them had been lingering around for quite a while. Only one was selling a K/M spread. Trading the K/M spread is one of my favorites but it really takes patience.

The six-day moving average carcass weight was steady at 214.50#. That is -1.54# yr/yr and only +0.81# over 2013. Packer hogs were down a bit and non-packer hogs were up. The differential between packer hogs and non-packer hogs is now only +1.30#. This suggests to me that packers have been running their hogs through the plants at a rapid clip. I suppose it is possible that they know it is time to get rid of hogs and they are jumping in front of the non-packers.

Best wishes,

dhm