MURICO.com Forum

The CME Component on the - - -

8/18/14 kill was down 1.77 to 110.24. The strong down trend continues and the high number of hogs purchased yesterday and the continued weakness in the cutouts keeps the stage set for cotinued weakness in the Index.

The VVVs are trading at a discount of 15.44 to the Index which is not particularly excessive in view of the fact that it was 13.81 on this date one-year ago. With a gap that wide and the uncertainty associated with the extent of the PED death losses, it appears to me that we need to be prepared for a lot of volatility as traders search for clues relative to where the supply curve will intersect the demand curve on 10/14/14.

Personally I think the VVVs will add a couple of points. The problem is that they may get dumped by several points before they get around to tacking on those points and I don't want to take a draw down of several points before they get around to giving the bump-up.

Best wishes,

dhm