8/19/14 kill dropped 1.93 to 108.31. That is within the projected range and it puts the HEV4s at a discount of 15.36 to the index. It seems that each time the index moves lower, the VVVs match the lower move and this keeps the gap in the 15-point range. There is quite a bit of time until the VVVs match up with the index on 10-14-14. I continue to expect to see part of the gap closed by some VVV strength but the down trend is so strong that I'm not wanting to get long yet. I have had some nice scalps today and am still on the short side of the VVVs.

The six-day moving average carcass weight dropped to 212.69#. That is only 8.74# heavier than on this date one-year ago. Packer hogs dropped quite a bit more than non-packer hogs. It continues to appear that packers are killing their hogs and letting the independent producers sweat-out the price decline.

Best wishes,

dhm