8/17/16 was down -$0.05 which is not much. The model projects that the component on yesterday's kill will drop between -0.10 and -0.40.

Still down.

The failure of the VVVs to follow through on Monday's rally may set the stage for some work to the down side.

My calculation is that the packers' national average cost of carcasses is 69.61. With cutouts at 74.36, their gross margin is $4.75/cwt, That is not enough to send them out into the bushes looking for hogs. With the VVVs discounted by -6.27 to the component, I'm expecting some sizeable moves in the VVVs as traders try to figure out how much of the "Gap" will be closed by a move in index and how much by a move in the VVVs.

I'm now flat the VVVs but I'm NOT flat the hog market. My boat has a decent cargo of spreads strung out on deck waiting for someone to come along with an attractive offer that will tempt me to off-load some.

Best wishes,

dhm