8-11-16 was down -0.52 to 67.30. This is one-half of the cash settlement index. The QQQs are now discounted to the component by -0.10. The model is projecting that the cash settlement for the QQQs will be 67.04 with a range of 66.79 to 67.29. From the afternoon reports the model is projecting the component on today's kill (Which is the other half of the cash settlement index) will be down between -0.45 and -0.75. The model assumed it would be down 0.52 to arrive at the projected cash settlement index.

The "Gap" for the VVVs has now been cut to -7.18. If packers don't scrounge up some buyers for the product, they may have no choice other than hacking away at their bid prices which they seem to have done again today.

The 6-day moving average carcass weight eased to 207.74# with packer hogs leading the way down although index hogs are a bit lighter at 207.11#. At any rate, producers seem to be quite current in their shipments. And this is how it should be considering the glut of pork that seems to be on the market right now.

When the QQQs showed some firmness this morning, I sold a bunch of them and am still short the VVVs for the weekend. Generally that is a "NO! NO!!" for me to go into the weekend with a directional position. The down-trend seems so strong that I couldn't resist the temptation.

Have a great week!

Best wishes,

dhm